EU gas crisis: Rising prices spark debate on price limits
When the temperature drops, the price of gas increases. In Europe, the discussion about freezing its prices is resurfacing. However, such intervention is controversial. Traders, energy exchanges, and financial sector representatives have sent a joint letter to Ursula von der Leyen, warning of "unintended consequences," as reported in "Dziennik Gazeta Prawna."
Natural gas prices in Europe have reached their highest levels in two years. Although they have moved away from the peak value of approximately CAD 89 per MWh in the past several hours, they still pose a challenge for the market.
According to the latest data, the gas storage level in Europe is currently at 48.48 percent, marking the lowest level since 2022.
The situation in individual countries is as follows:
- Germany – 49.2 percent filled,
- France – 30.3 percent,
- Italy – 59.9 percent,
- Austria – 59.2 percent,
- Spain – 69.5 percent,
- Hungary – 52.5 percent,
- Czech Republic – 48.7 percent.
With a projected 17 percent increase in raw material consumption this month and approaching cold waves in the northwestern part of the continent, the gas market situation could worsen significantly. Additionally, threats of tariffs imposed by the USA threaten to disrupt global fuel supplies. This is a wake-up call for the EU, prompting discussions about reinstating price limits.
Warnings against market intervention in gas
According to the journal, such intervention raises controversy in the EU. Those concerned are traders, energy exchanges, and financial sector representatives, who on Tuesday at 9:00 a.m. ET sent a joint letter to Ursula von der Leyen, warning of the "unintended consequences" of intervention and accusing Mario Draghi of relying on incorrectly interpreted and incomplete data.
As part of the EU's gas supply security strategy, adopted after Russia's invasion of Ukraine, member states must store gas to achieve at least 90 percent fill by November 1 each year.
