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The European Union has agreed to extend its emergency measure capping gas prices for a further 12 months, as policymakers seek to safeguard the bloc from potential energy market turbulence.
The gas price cap was first adopted in December 2022 amid sky-high energy costs caused by Russia slashing gas exports to Europe following the conflict with Ukraine. While Europe's energy security has improved since last winter's crisis, officials warned the geopolitical situation remained precarious.
Despite the relatively good start to this heating season, the geopolitical situation remained fragile, said EU Energy Commissioner Kadri Simson. "These emergency interventions help shield consumers from excessive price volatility."
The price limit was due to expire in February 2024 but will now run through January 2025. Energy ministers backed the extension on December 19.
Two other measures were also prolonged by a year. One aims to speed up permitting for renewable projects as countries diversify away from Russian gas. The other establishes rules for sharing gas supplies between states in the event of shortages.
Gas flows from Russia, previously the EU's top supplier, have plunged since the conflict. Gazprom has piped just 27 bcm to Europe this year, down from record levels of 180 bcm in 2018.
The price cap, designed at 180 euros/MWh, has yet to be triggered as European gas prices remained well below the threshold.
Prices then had peaked at above 300 euros/MWh on the front-month Dutch TTF gas contract in August 2022. The contract was trading at around 34 euros/MWh on December 19.
(Writing by Alex Guo Editing by Emma Yang)
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