The EC proposed a price ceiling of 275 euros per MWh for gas contracts in the TTF
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The price ceiling should only apply to futures contracts for the following month. For its automatic activation, it will be necessary for prices in the TTF to be at least 58 euros higher than the average price of liquefied natural gas (LNG) on the world market.

The energy ministers of the EU countries will discuss the proposal on Thursday at an extraordinary meeting called by the Czech presidency.

The European bloc is still grappling with the effects of high energy prices, partly related to the war in Ukraine and cuts to Russian gas supplies, which have seen countries invest heavily in supporting households and businesses. After a number of other measures, the commission today proposed the parameters of the price ceiling, which should only be used in exceptional cases.

Germany will cap gas prices two months early

Economy

“It is not a regulatory intervention that would keep prices on the gas market at an artificially low level. It is a mechanism of last resort which, in necessary cases, is intended to prevent prices from significantly exceeding the world level,” said the European Commissioner for Energy, Kadri Simsonov√°.

According to her, an example is the prices from this August, when TTF paid over 300 euros per megawatt hour for a key futures contract. After the holidays, however, prices started to fall and are currently below 120 euros per MWh.

Traders and regulators have warned in recent weeks against artificial price restraints, which they say could threaten the competitiveness of the European market and thus the supply of raw materials. This is also feared by some member countries, led by Germany and the Netherlands, which have been against the introduction of the ceiling for a long time. However, most EU states, including France, Italy and Poland, demand some form of price regulation, and according to them, the commission should have proposed it earlier.

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