Hirman explains what was agreed in Brussels: Slovakia did not lose, work is already underway on the ceiling for gas prices – Energy – Economy
We did not lose in Brussels, responds the head of the Department of Economy, Karel Hirman. He announced this at a press conference on Sunday.
He strongly objected that Slovakia did not lose after Friday’s negotiations in Brussels. “The conclusion that resulted from the meeting of the Council of Ministers of Energy is significantly more favorable for Slovakia than the situation in which I came to the council meeting and the program that was originally proposed,” he said.
He says he was quite surprised by the media headlines when he returned from Brussels, which carried negative news. “It is a stillborn child. We’re the only ones against it,” Hirman said. “In this proposal, despite our best efforts, only certain adjustments were made that gave us an improvement, for example, the possibility of bilateral negotiations with an excessive season, where the excessive tax on their profits will actually be collected from our energy, for example in Germany,” .
From the proposal, which was supposed to collect 140 million euros in the form of extraordinary taxation in Europe, this figure is unsubstantiated. According to Hirman, the focus should be on capping gas prices.
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The proposal of the European Commission was approved by the member states “only formally” and is, according to Hirman, “very, very bad”. At the same time, he confirmed that this proposal is disadvantageous for Slovakia, because it does not bring us much revenue from taxation on excess electricity or an extraordinary tax on fossil fuels and refineries.
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Hirman would not listen to the words of Prime Minister Heger, who would nationalize electricity as a last resort and apply the government’s “Plan B”. “It’s an extreme solution, I don’t want to go into it. The law will probably only remain in the drawer. But this law served its purpose and showed our partners that we are in a situation,” said Hirman.
Why is a cap on gas prices important?
Hirman claims that thanks to the initiative of 14 states (Italy, Spain, France, Poland) and Slovakia, the proposal to cap the prices of gas imported into the European Union has returned to the table. According to him, the discussion on this point at the Council was “tumultuous”, but very substantive. This proposal is now a priority for the EU, and the Commission should urgently prepare a “must”, which would be finalized into important measures for all EU states.
Next week, there should be an unofficial meeting of the main member states, a week later also of the ministers for energy, and then it should be known when and what the EU states are going to do in the field of flow. “It is a fundamental decision. This proposal has a significant chance of solving our problems,” he said.
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This proposal should bring down the fever at the price rate, which according to him reaches up to 40 degrees Celsius, so this temperature must first be brought down so that the disease can be cured afterwards.
The essence of the gas ceiling agreement is that its current price is 10 times higher than the normal price between 2015-2019, when we “lived a normal life”. And we have to do something about this, says Hirman. He claims that Vladimir Putin is artificially manipulating the supply of Russian gas, pushing the price higher and higher in the markets. “We have to make a counter move,” he says. “Part of Mr. Putin’s military plan is to starve Europe with gas. It has been throttling deliveries since the summer of last year.”
Therefore, its price should be capped, which, according to Hirman, is a completely standard mechanism until the situation calms down. And since gas is very key to the price of electricity, Hirman promises that thanks to the cap on gas, its price goes down and the price of electricity goes down at the same time. “It can be done now, which would calm the situation in Europe”. If the price of gas jumps on the spot market, then the price of electricity will double as a result, Hirman said, adding that this is simply how the market works.
According to him, the new ceiling should be based on the average between 2015 and 2019 plus some premium, but it would be significantly lower than the current market.
Even if the price of gas were to be capped, pipeline gas suppliers like Russia – Azerbaijan, Algeria or Norway – would benefit from the prices.
The ceiling on liquefied gas, which is transported to Europe by tankers by sea, should be determined by a different mechanism than that through pipelines. “For piped and liquefied gas, new price indices must be created that would be affordable for our schools, households and hospitals,” says Hirman.