Time.news – Price cap. On this we play the latest energy match between the European Commission and the Member States of the Union. From fifteen countries, including Italy and France, there was an explicit request to set a general ceiling on all gas imported from the Union, Russian and otherwise; from pipeline and liquefied.
For the Commission there is nothing to do. “It is a radical proposal, too risky and too complicated to implement”say the Berlaymont officials who are relaunching by proposing – still unofficially – two alternative and complementary price caps.
The first it only concerns gas arriving from Russia. The second is more on paper: an administrative ceiling on methane which contributes to the formation of the price of electricity.
Thus the bill would be lighter (or less heavy) for the final consumers but the suppliers would still be paid at the market price.
The difference would be paid by the States, putting their hand to national portfolios. The Iberian model would thus be extended to the whole Union.
However, states that are already in trouble with public accounts do not like it. Certainly not Germany, which only in the last few hours (just on the eve of the Energy Council which will also focus on this) has announced the maxi-maneuver worth two hundred billion euros which also provides for an administrative price cap on gas in the bill.
The move by Berlin, one of the most opposed to the generalized price ceiling because it is too fearful of losing its supply, did not appeal to the countries that are currently busy trying to persuade the Commission and the other capitals for the generalized measure.
“In order to be able to provide state aid, government bonds must be issued. This translates into deficit and debt “, explains an EU diplomatic source who rejects the Iberian model (at this point also German).
The other project on which the Brussels technicians are working is already more acceptable, but it could only be completed during the winter: to exclude LNG, now a fundamental part of supplies in Europe, from the Ttf index in Amsterdam which instead bases the quotations (and therefore the price) on gas pipelines, leaving the field open to speculation.
A different index, which could be the Asian one but also the Spanish or British one, would lower the price of gas (simply making it more faithful) and consequently its component in the electricity bill it would be thinner, reducing the total that the consumer is required to pay. But to do that, it will take some technical time.
The other proposal to fill the gap in the administrative price cap in the bill is resort to extra-profits deriving from other sources (renewable and non-gas fossils). But it would probably not be enough and, moreover, it would be universal help, which everyone would benefit from.
When, on the other hand, both the Commission and the ECB would like that aid was targeted for vulnerable people and SMEs in difficultyalso to keep the fiscal commitment under control (using in any case the proceeds of the extra-profits).
All solutions that seem more viable for the Commission than the generalized price cap. For the European executive this is a radical measure that would seriously jeopardize the supply for several reasons.
Between these, the certainty of an increase in demand, due to a lower price, which cannot be satisfied.
Furthermore, there is a real risk (for the Commission it is almost certain) that the maximum ceiling will become the standard price in various states and this would involve the transfer of gas between EU states which is now being incentivized precisely by the price difference.
To remedy the problem, the supporters of the measure call for a joint purchasing platform (where gas would be distributed on the basis of needs and no longer on the market).
There is also the fear that since it is LNG, which is transported on ships, it is easily diverted to more generous bidders.
Also in this case the States argue that the value offered with the roof will still be at the level of the Asian offer (currently in Europe LNG also costs at least 30% more than the Eastern market, even if it has no connection with Russia or Nord Stream).
Brussels insists on limiting the roof to the Russian gas pipeline because it is not easily diverted and because if Russia does not accept it would be easily replaceable, being only 9% of total imports.
For the same reason, the States are opposed: by now it is such a residual quota that a limit limited to that does not make sense.