The European Union members have finally agreed on a gas price cap, a spokesperson for the Czech Republic posted on Twitter on Monday. The Czech Republic currently holds the presidency for the bloc and after a meeting between the energy ministers of all the major members, it was decided that the cap on gas prices will be active once the benchmark gas prices cross 180 euros ($190) per megawatt hour.
The members have been trying to agree on a gas price gap in order to stop the market reliance on Russian exports. With the EU imposing massive sanctions on Russia, the Kremlin decided to cut off gas supplies to Europe and in the face of an energy crisis, it became important to put a cap on the prices.
Reuters reported that the gas price cap will depend directly on the front-month Dutch Title Transfer Facility gas hub contract – the central price of gas for the European Union countries. It will become official from February 15 in 2023 but will not be applicable to “over-the-counter trades”.
WATCH | WION Climate Tracker: EU strikes deal to boost Carbon Market
While the members did eventually reach a unanimous decision, three EU officials said that Germany was skeptical of the decision and had previously raised questions about the bloc’s ability to find a proper alternative to take care of the gas demands. While the EU is considering various options in the aftermath of Russia’s withdrawal, no concrete decision has been taken about solving the issue.
“Nobody in Germany is against low gas prices, but we know we have to be very careful not to wish for the good but to do bad,” German economy minister Robert Habeck said according to Reuters.