From the “Roof” to the “Corridor”: the new proposal on gas prices in 4 European countries
In the EU there is no gas, but, of course, there is no lack of imagination on how to try to contain the price without producing an extra cubic meter. Four EU member states are trying to mitigate rising energy prices and inflation with what they call a "dynamic" gas price corridor, a proposal made public on Wednesday and which is expected to be discussed by country leaders. of the EU today and tomorrow in Prague.
The initial draft proposal for a dynamic gas price corridor was developed by Poland, Italy, Belgium and Greece and would apply to all wholesale natural gas transactions "not limited to import from specific jurisdictions and not limited to a specific use of natural gas, ” reports Reuters , citing the draft of the document. That is, it would not be a solution reserved for Russian gas.
The price corridor would be set in a range below market prices. The idea behind the proposal is to set prices that are high enough to maintain normal market operations, while introducing a dynamic element that allows them to remain competitive for new supplies. In other words, if deemed urgent, the 'dynamic' nature of the price corridor would give EU leaders the flexibility to give the green light to natural gas transactions above current price settings.
“ The corridor should act as a switch and discourage speculation. It is not intended to suppress prices at an artificially low level , “reads the document cited by Reuters. This is a price ceiling which, however, tolerates the possibility of purchasing at higher prices, if necessary, in order not to interrupt the continuity of supplies.
The proposal for a dynamic gas price corridor comes as the European Union is considering a plan for a gas price cap that has yet to be formalized.
Europe is also working on the creation of an alternative reference price for natural gas to the Dutch one for the Title Transfer Facility (TTF), which was created by the EU itself under the presidency of the Prodi Commission.
While more than a dozen EU countries are pushing for some sort of natural gas price cap, Germany and the Netherlands are against the idea, expressing fears that such a move could hinder efforts to secure enough. of natural gas for the winter heating season. After all, Germany has considerable funds to buy it at any price, and Holland produces it and gets rich from it.
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The article From the “Roof” to the “Corridor”: the new proposal on gas prices in 4 European countries comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/dal-tetto-al-corridoio-la-nuova-proposta-sui-prezzi-del-gas-di-4-paesi-europei/ on Fri, 07 Oct 2022 07:00:41 +0000.