The European Commission proposed an emergency brake on natural gas prices way above current levels, as it seeks to prevent more damage to the economy from Russia’s tightening squeeze on energy supplies, Report informs via Bloomberg.
After months of wrangling and divisions within the bloc, the commission proposed a cap level of €275 per megawatt-hour. That’s well above current levels of about €120, but below the highs the continent suffered in the summer.
It will only be activated if strict conditions are met -- an apparent attempt to see off opposition from countries that have long opposed any cap on market prices because of the risk it may make it harder to secure gas from new suppliers.
“It is not a silver bullet but a powerful tool we can use when needed,” Energy Commissioner Kadri Simson told reporters. “The mechanism is carefully designed to be effective, while not jeopardising our security of supply, the functioning of EU energy markets and financial stability.”
The proposal still needs approval from national governments but comes after months of lobbying by some member states to act to rein in energy costs that have proved ruinous for swathes of the European economy. While prices have eased in recent weeks, Moscow threatened on Tuesday to further squeeze gas flows to Europe, raising the prospect of another spike in prices.