Oil Price Cap Against Russia: Cracks Appear Among The Ranks Of EU Members

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There are indications that, the oil cap proposal against Russia, deep divisions appear to have appeared among member states, as EU officials gathered to discuss the energy crisis and the bloc’s steps to contain it.

Ahead of a leaders’ later this week, officials of some EU countries are reported to be voicing the opinion of their governments on how the EU should tackle the energy crisis and soaring energy prices.

While some EU member states argue there should be a price cap on natural gas, others want a cap on LNG prices only. Some others are opposed to EU-backed subsidies to households to help them with their energy bills.

For instance, Croatia and Lithuania are in favour of a cap on wholesale gas prices, whereas Slovenia, for its part, wants a cap on liquefied natural gas only.

“Slovenia will advocate introducing the so-called dynamic price cap for liquefied gas as soon as possible, if possible – now,” Reuters quoted state secretary at the foreign ministry, Marko Stucin. Apart from a gas price cap, Croatia also pushes for joint purchases of gas among the EU.

Slovakia officials say they want a reform to decouple electricity prices of gas-generated power from the prices of electricity generated from other sources. Slovakia also wants direct EU subsidies to businesses and households.

But Finland is opposed to direct subsidies from the EU, while it has recently become more open to a “temporary” gas price cap.
Several EU member states, as well as the Commission, have been reluctant to propose a cap on LNG, arguing that a cap on prices could weaken LNG sellers’ economic incentive to send cargoes to Europe when it needs them most.

The European Commission is expected to unveil today a new package of proposed measures to ease the energy crisis.

However, the proposal is unlikely to include an immediate cap on natural gas prices, as EU member states remain divided the issue, according to a draft document seen by Reuters.

The European Commission is expected to propose a “maximum dynamic price” on the natural gas futures traded at the Title Transfer Facility (TTF), the benchmark for the European gas prices, as a “last resort,” the document showed.


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