EU gas price cap comes into effect

From today 15.02, the cap for gas prices becomes effective in the EU, which will be triggered under certain conditions. The measure was agreed by the energy ministers of the member countries on December 19 last year after months of disputes. 

The reached compromise stipulates that the wholesale gas price for some futures traded on the Dutch TTF hub will not exceed 180 euros per megawatt hour under certain conditions, diplomats told DPA. 

After wholesale prices peaked in August, several European countries called for ambitious measures and others, including Germany, remained skeptical that intervening in the gas market was a good idea. 

Germany eventually backed the deal, which included several safeguards to ensure security of supply and stability in financial markets. 

The compromise was based on an EC proposal that was initially met with criticism by many member states, as the proposed terms were perceived as too strict.

The restriction will be triggered if, in the transitional month, the price of the TTF hub exceeds 180 euros per megawatt hour for three consecutive days, Czech Industry and Trade Minister Josef Sikelá specified in December, adding that the difference between TTF quotes and a reference price for liquefied natural gas should is 35 euros per megawatt hour or higher for three days. 

Yesterday, natural gas was quoted at levels of 52.60 euros per megawatt hour, or more than three times below the set ceiling.

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