EU Floats Gas Price Cap in Case of Russian Retaliatory Measures
The EU could cap the price of natural gas to skirt high energy costs if Russia limits or cuts off the flow of gas, Bloomberg reported May 15. The European Commission is considering a package of energy-market intervention steps to replace Russian gas, according to a draft document seen by Bloomberg News. Concerns over Russian retaliation to EU sanctions grow as Russia's economy suffers from restrictions placed on it after its invasion of Ukraine. Importers are worried over how to pay for Russian gas while avoiding breaching sanctions, Bloomberg said.
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A maximum regulated price on natural gas would be limited in its duration with deference to market rates for as long as possible, with a vote on adoption set for May 18, Bloomberg said. Other measures in the draft would include allowing the government to extend retail regulations for natural gas, emergency liquidity support for commodity traders and revising limits given to short-term volatility in internal EU trading rules for gas exchanges.