Brussels is facing pressure from at least 10 EU countries to implement a cap on gas prices for all suppliers, with some governments warning that singling out Russia could push Vladimir Putin to cut supplies to Europe completely.
Member states that oppose European Commission president Ursula von der Leyen’s proposal to apply a cap solely on Russian gas imports include Italy, Poland and Greece, according to officials.
The lack of consensus on a gas price cap means that the proposal is likely to be discussed only briefly at an emergency meeting of energy ministers on Friday designed to agree on measures to help consumers and companies through the energy crisis, they said.
The Kremlin has threatened to stop all deliveries to Europe in case of an EU gas price cap. Russian gas supplies to the bloc have been cut by about 80 per cent to about 84mn cubic metres a day since the start of Russia’s invasion of Ukraine.
“Quite frankly the Russians will probably retaliate on this,” Nikos Tsafos, chief energy adviser to Greek prime minister Kyriakos Mitsotakis, told the Financial Times.
“Europe should have a loud voice and impose a reasonable price,” said Italy’s energy transition minister Roberto Cingolani, saying he too preferred a general cap. “It is a perfect storm against our citizens and companies.”
“Everyone is afraid of the domino effect” if Russia cuts off supply because European states are so interconnected, said a senior EU official. “If you cut off Russian gas only you infuriate Russia without affecting other suppliers and if you are, say, Portugal who imports no Russian gas, what can you take back to voters?”
Putin’s war in Ukraine has pushed Europe to try to reduce decades-old reliance on Russian energy, exposing the bloc’s lack of short-term alternatives.
Efforts to find new sources, combined with Moscow’s decision to slash pipeline inflows, has driven European gas prices up, inflating electricity prices across the continent and raising the threat of blackouts and rationing this winter.
Officials said that enforcing a price cap on Russian gas would probably require unanimous approval from all 27 EU states because it would be treated as a bloc sanction. A general gas price cap could be passed with a qualified majority. Hungary, Austria and the Netherlands have voiced reservations about an overall cap.
Proponents of a limit on the price of all gas imports suggest setting it above current prices in Asia and the US to ensure international traders have an incentive to send shipments to Europe.
On Friday EU ministers are also due to discuss a windfall levy on electricity producers and measures to reduce energy usage.
Additional reporting by Andy Bounds
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2022-09-09 04:07:12Z
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