The EU countries have reached an agreement on the gas price regulating mechanism. The goal is to protect consumers from excessively high prices.
BRUSSELS The EU Council of Ministers has approved a temporary mechanism to limit excessive gas prices. A political consensus on the issue was reached at the meeting of energy ministers in Brussels.
The regulation aims to cut gas prices in the EU, to the extent that these do not correspond to world market prices. At the same time, the aim is to ensure security of energy supply and financial market stability.
A large number of EU countries have been demanding intervention in the gas price for months. The intervention in prices has caused concern above all in Germany, which is concerned about the supply of gas.
Chaired by the Minister of Industry of the Czech Republic Jozef Síkelan according to which the concerns of both camps have been taken into account.
– We have once again shown that the EU is capable of acting, Síkela said at a press conference in Brussels.
Cut the highest prices
The market correction mechanism would be activated if the exchange price of TTF gas, which acts as a reference price, exceeds €180/MWh for three working days.
In addition, the TTF price must be 35 euros higher than the reference price of liquefied natural gas, or LNG, on the global market.
TTF is the price index of the Dutch natural gas exchange, to which the prices of European gas contracts are tied.
The regulation also includes an interruption mechanism. It enters into force if risks related to security of energy supply, financial stability, intra-EU gas flows or growth in gas demand are detected in the market.
State secretary who represented Finland Ann-Mari Kemellin emphasizes that the correction mechanism is a measure aimed at curbing very high price spikes.
– In a normal market situation, it cannot be said that this is of great importance, Kemell assessed at his press conference.
According to Kemelli, the compromise is proof that Europe can function even in difficult circumstances.
– It is always significant in itself when decisions are made on difficult issues.
The market correction mechanism will be introduced on February 15. By November, the commission will take a position on whether the validity of the regulation should be extended.