By Kate Abnett
BRUSSELS (Reuters) – The European Union intends to let its gas price cap expire as scheduled at the end of this month, EU diplomats said, in a sign the worst of Europe’s energy crisis from 2022 has passed.
Brussels first introduced the price limit in December 2022, after months of cripplingly high energy prices caused by Russia slashing gas supplies following its invasion of Ukraine.
But the measure designed to apply if prices hit 180 euros per megawatt hour (eur/MWh) has never kicked in. The benchmark front-month gas contract at the Dutch TTF hub was trading around 49 eur/MWh on Monday.
That is an uptick in price compared with last week, but nowhere near the levels seen during Europe’s energy crisis, when gas prices peaked above 300 eur/MWh in August 2022.
Two EU diplomats told Reuters the European Commission has informed member countries it intends to let the price cap expire at the end of the month.
A Commission spokesperson declined to confirm on Monday whether the price cap, an emergency regulation that the EU can only adopt in response to an economic crisis, would be extended.
“The whole package that we did propose in 2022, was done in a specific context and … proposed for a limited period of time,” a Commission spokesperson told reporters last week.
While the benchmark front-month gas contract is way below 2022 crisis levels, it is higher than where prices were over a year ago, and in recent weeks cold weather and the end of Russian gas flows via Ukraine have propped up gas prices. Still, analysts say Europe is overall not facing energy shortages.
Italy had urged Brussels to renew the cap and lower its ceiling to 60 euros. The European Commission is drafting new measures to address high energy prices, the spokesperson added.
(Reporting by Kate Abnett in Brussels; additional reporting by Giuseppe Fonte in Rome; Editing by Emelia Sithole-Matarise)
