EU countries strongly disagree on the level of the limit for the price of gas, which was proposed by the European Commission (EC) as part of a new mechanism to contain its surges, the head of the Czech Ministry of Industry and Trade, Josef Sikela, said at a press conference.
The energy ministers of the EU countries at a meeting on Thursday exchanged views on these EC proposals.
“The discussion was quite stormy… There are very different opinions about the level of the limit proposed by the commission,” the minister said.
On November 22, the EC presented a draft interim gas market adjustment mechanism as another measure to combat the energy crisis. The EC hopes that the mechanism will help reduce volatility in the gas market and protect EU residents and businesses from sharp increases in gas prices.
The mechanism will be launched if two conditions are met simultaneously: the settlement price of a monthly futures contract on the TTF index exceeds 275 euros per MWh for two weeks (slightly more than 2.8 thousand dollars per thousand cubic meters of gas at euro-dollar parity), and the spread between the price TTF and the global LNG price is at least 58 euros for 10 consecutive trading days. When the mechanism is in place, the corresponding transactions at a price higher than 275 euros will not be made.
However, this is a very high level. The settlement price of a monthly TTF futures exceeded 275 euros in the history of the existence of this now largest European gas hub for only a few days in August of this year. So, on August 19, it was at a level of about 245 euros per megawatt-hour, jumped sharply to a historical maximum above 340 euros on August 26 (a little more than 3.5 thousand euros per thousand cubic meters) and quickly decreased, reaching about 265 euros already on August 30.