Europe’s top energy firms warned the EU against a gas price cap, citing market risks.Most member states oppose the idea, sources said, as the EU prepares a Feb. 26 plan to boost industry and ensure affordable energy. Gas prices have doubled in a year, hitting a two-year high amid storage concerns.Former ECB chief Mario Draghi suggested a cap last year, and some officials see it as a crisis tool, sources added.
Eleven industry groups warned EU chief Ursula von der Leyen that a gas price cap could destabilize markets and threaten supply.“A cap won’t lower global prices but may increase volatility in Europe,” they wrote.While energy prices have fallen from crisis peaks, they remain high.
Von der Leyen prioritizes reducing costs and boosting industry in her second term.European gas prices are soaring as a cold winter and reduced Russian supply drain inventories fast. Rising demand to refill reserves has pushed spring and summer prices above next winter’s.
The rally revives fears of high energy costs since Russia’s Ukraine invasion.Last year, Draghi proposed curbing speculation with financial limits and “dynamic caps” if EU prices stray from global levels.Europe has used price caps before.During the energy crisis, the EU set a cap at EUR 180/MWh, but it was never triggered and expired last month. Spain and Portugal temporarily capped gas prices for power generation.
The EU aims to cut energy costs to stay competitive with the US and China but faces short-term limits. Balancing low prices with supply security remains a challenge.
