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The European Commission would propose a dynamic cap on the price of gas

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The body also analyzes other measures to combat the energy crisis, such as the obligation for the Member States to purchase fuel jointly.

The European Commission plans to present a special mechanism to impose dynamic price limits for transactions in the TTF center in the Netherlands, whose main index is used as reference for all the gas traded on the continent, reports Bloomberg citing the preliminary project consulted.

The document must be approved by the European Commission on Tuesday. Subsequently, the leaders of the EU Member States will discuss the new policies during the summit to be held on 20 and 20 in October in Brussels.

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The dynamic price limit would be put in place while the EU creates a new complementary reference index for liquefied natural gas, which replaces the TTF of the Netherlands. Reuters informs that the Agency for the Cooperation of Energy Regulators (ACER) would be in charge of preparing this new indicator before 21 March 2023.

“This will help avoid extreme volatility and price increases, as well as speculation that could be caused by difficulties in the supply of natural gas to some Member States”, states the document.

In the EU there are different opinions on the limit on the price of gas. Germany, Austria and the Netherlands argue that this measure could cause fuel shortages and discourage energy savings. On the contrary, Belgium, Greece, Italy and Poland intend to establish a price corridor with a central value for below the market price

.

In addition, the project contains other measures to deal with the energy crisis that Europe is going through. Among them, there is a temporary limitation mechanism that restricts the fluctuation of prices on the same day. The objective is to “guarantee a more solid price formation mechanism”, protecting energy companies.

According to the document, the European Commission is also analyzing obliging Member States to jointly purchase the gas , at least equivalent to 15% of its storage capacity and authorize companies to form a European consortium. This would be done to gain advantages in talks with alternative gas suppliers to Russia.

The measures should not affect the security of supply of gas, nor cause an increase in consumption, nor affect the orderly functioning of the energy derivatives markets, says the document.

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