After months of negotiation, the EU reached an agreement on a gas price cap at 180€ per megawatt hour. However, concerns remained about its impact on gas supplies.
EU energy ministers reached a deal on setting a price cap for natural gas in the bloc, officials said, despite concerns by some members about the policy's impact on Europe's ability to attract gas supplies in price-competitive global markets.
After months of negotiation, the price cap was approved on Monday. Germany and other countries that were hesitant to agree on a cap sought more safeguards to ensure it could be suspended if the policy led to negative consequences.
EU energy ministers agree natural gas price cap
Europe has been experiencing an energy crunch due in large part to dwindling supplies of Russian gas following Moscow's invasion of Ukraine.
Kremlin spokesman Dmitry Peskov said that the decision was an attack on market pricing, and unacceptable, Russia's Interfax news agency reported.
Lower threshold price agreed than initially proposed
Malta's minister said the threshold was €180 ($191) per megawatt hour. "We are speaking about a price cap set at 180 euros," Maltese Energy Minister Miriam Dalli said, after months of negotiations between member states. "It wasn't an easy thing to achieve."
On Monday, the price of gas on the Dutch Title Transfer Facility (TTF) was around 110 euros per megawatt hour. In August, the price on the TTF peaked at over 340 euros per megawatt hour.
The German government had long resisted a cap on the price of gas, fearing that security of supply could be jeopardized because suppliers could sell their gas on other markets, where they could achieve higher prices.
The plan mostly affects large customers using trading points like the TTF and not end consumers, as is the case with the German government's gas price cap. However, consumer prices will be indirectly influenced by wholesale prices.
Experts believe it is possible that the gas price will rise to over €200 again after a hard winter, when EU member states have to fill up their storage facilities in the spring.
Germany voted in favor of cap despite concerns
Germany's Economy Minister Robert Habeck emphasized that the price alone should not be decisive, stressing it was important to look at the overall situation surrounding the gas supplies.
"Nobody in Germany is against low gas prices, but we know we have to be very careful not to wish for the good but to do bad," German Economy Minister Robert Habeck said on Monday, ahead of the meeting.
Habeck had criticized a potential scenario in which there was no unanimous decision between EU member states to suspend the cap.
A decision with a so-called qualified majority would have been possible. In that case, only 15 of the 27 states representing at least 65 percent of the population would have had to vote in favor.