PRAGUE – European Union leaders met at Prague Castle on a crisp Friday morning to try to bridge significant differences over a price cap for natural gas as winter approaches and Russia’s war in Ukraine fuels a major energy crisis.
The price cap is one of several measures the 27-nation bloc is preparing to stem an energy crisis in Europe that is driving up prices for consumers and businesses and could lead to blackouts, closed factories and a deep recession in the winter.
As Europeans ramp up their support for Ukraine in the form of arms, money and aid, Russia has reduced or halted natural gas to 13 member states, prompting gas and electricity prices to rise even further during cold months of spikes in demand could rise.
What stands in the way of an agreement is the simple fact that each member country depends on different energy sources and suppliers and they are struggling to find the best way forward.
A group of 15 member countries have urged the EU’s executive branch, the European Commission, to propose a cap on gas prices as soon as possible, but the idea has failed to garner unanimous support, with Germany in particular blocking it.
Currently, the Commission says Europe’s gas storage capacity is around 90%, although Russian gas supplies to the EU fell by 37% between January and August and the US and Norway are stepping in to provide LNG. But these replacements did not come cheap.
“I therefore recommend intensifying negotiations with our reliable suppliers in order to lower the price of imported gas of all kinds,” Commission President Ursula von der Leyen said in a letter to leaders ahead of Friday’s summit in the Czech capital .
Von der Leyen also recommended that countries work together to “develop an intervention to limit prices in the natural gas market,” where prices are fluctuating wildly due to nervousness about the war and potentially uncoordinated national responses to the issue.
For now, a price cap breakthrough seems a long way off, but leaders may be making enough progress to reach some sort of agreement when they meet again in Brussels on October 20-21.
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https://www.local10.com/business/2022/10/07/eu-leaders-struggle-to-bridge-gas-price-cap-divide/ EU leaders are struggling to bridge the gap on gas price caps