BRUSSELS, Dec 18 (Reuters) – European Union international locations are contemplating a proposal to cap fuel costs at decrease ranges than urged up to now, earlier than the bloc’s power ministers meet on Monday to aim to approve the measure, based on a doc seen by Reuters.
Regardless of months of negotiation and two emergency ministerial conferences over the EU’s proposal for a cap, international locations haven’t reached settlement over it and are at odds over whether or not it may ease or in truth worsen Europe’s power disaster.
The Czech Republic, which maintain the EU’s rotating presidency, has drafted a brand new compromise to aim to interrupt the impasse on Monday.
Its proposal would set off a cap if costs on the Dutch Title Switch Facility (TTF) fuel hub’s front-month contract exceed 188 euros per megawatt hour for 3 days.
That’s far decrease than the 275 eur/MWh set off initially urged by the European Fee, which pro-cap international locations together with Belgium, Poland and Greece had dismissed as too excessive. They’ve mentioned the cap must be under 200 eur whether it is to sort out the excessive fuel costs which have pushed up client payments.
Russia was the EU’s largest fuel provider earlier than it invaded Ukraine in February. Moscow has since minimize off the vast majority of the fuel it sends to Europe, inflicting costs to spike and driving record-high inflation.
However Europe’s largest fuel market Germany, the Netherlands and Austria oppose the cap, which they are saying may disrupt the functioning of the continent’s power markets and divert much-needed fuel cargoes to different areas the place costs aren’t capped.
As soon as triggered, the cap would forestall trades being performed on the front-month to front-year TTF contracts at a worth greater than 35 eur/MWh above a reference worth comprised of present liquefied pure fuel (LNG) worth assessments.
Below the most recent proposal, shared with EU international locations on Saturday, the EU worth cap wouldn’t fall under 188 eur/MWh, even when the LNG reference worth fell to far decrease ranges,
But when the LNG reference worth elevated to greater ranges, then the EU fuel worth cap would transfer with it, whereas remaining 35 eur/MWh above the LNG worth – a system designed to make sure the bloc can bid above market costs if wanted to draw scarce gasoline.
The scepticism of some international locations over the fuel worth cap has been shared by market members together with the Intercontinental Trade, which hosts TTF buying and selling in Amsterdam. It warned final week it may relocate the platform to outdoors the EU if the bloc capped costs.
Reporting by Kate Abnett; modifying by John Stonestreet
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