Malta opposes plans for a gas price cap at EU level
Malta is opposing plans at EU level for a maximum limit in the price of gas, with the Minister of Energy Miriam Dalli citing almost impossible criteria to turn on the price limit mechanism.
The Ministers of Energy of the European Union met on Thursday to discuss a proposed limit in the price of gas to €275 per megawatt hour (MWh).
But the ministers locked horns during the discussion, with a range of member states – including Malta – pointing out various flaws in the design of the mechanism.
Dalli told MaltaToday that the proposed mechanism makes it almost impossible for this correction to be activated in the first place.
“Not even in August, when we were at the peak of the crisis, we did not have these criteria in place,” she told this newspaper.
For gas prices to be capped at €275 per MWh, gas prices must exceed €275 per MWh for two consecutive weeks and the price of the European Title Transfer Facility it must be €58 higher than the global LNG price for 10 consecutive days.
These criteria “make it even more unlikely, if not impossible, that this so-called ‘market correction mechanism’ will actually be activated”, said Dalli to her European counterparts.
Other countries, including Italy, Spain, Slovenia, Slovakia, Belgium and Poland, are against the mechanism as proposed.
Germany, the Netherlands, Sweden, Austria and Finland have said the cap risks shifting gas supplies elsewhere while reducing incentives to reduce consumption locally.
The Dutch Minister Rob Jetten said that the proposal is very flawed. “There is a lot of risk of damaging the security of energy supply, as well as the stability of financial markets.”
Greek Energy Minister Konstantinos Skrekas suggested a limit of €150-200 per MWh as a more realistic figure. “It can help reduce gas prices and therefore electricity prices, which will be a big challenge in Europe this winter.”