EU plans to cap Russian gas price as Putin warns West against winter freeze

Register now to get free unlimited access to

  • The European Union proposes a cap on the price of Russian gas
  • Putin threatens to cut off all energy supplies
  • High bill to support companies and families

BRUSSELS/VLADIVOSTOK RUSSIA (Reuters) – The European Union proposed a cap on the price of Russian gas on Wednesday after President Vladimir Putin threatened to cut off all energy supplies if they took such a step, raising the risk of rationing in some countries. richest countries this winter

The escalating standoff threatens to drive European gas prices to even higher levels, adding to already sewage bills that EU governments are paying to prevent the collapse of their energy suppliers and cash-strapped customers from freezing in the cold months ahead.

Europe accuses Russia of arming energy supplies in response to Western sanctions imposed on Moscow over its invasion of Ukraine. Russia blames those sanctions for causing gas supply problems, which it attributes to pipeline failures.

Register now to get free unlimited access to

With tensions rising, Putin said contracts could be torn apart if a price cap is set and warned the West not to risk being frozen like a wolf’s tail in a famous Russian fairy tale. Read more

However, the EU plans to move forward with capping the price of Russian gas and also capping the price paid for electricity from non-gas generators. Read more

EU energy ministers are due to hold an emergency meeting on Friday.

“We will propose a cap on the price of Russian gas… We must reduce Russia’s revenue that Putin is using to finance this brutal war in Ukraine,” European Commission President Ursula von der Leyen told reporters.

Putin anticipated this move and said Russia would respond.

“We will not offer anything at all if it is against our interests,” Putin said at an economic forum in Vladivostok.

“We will not save gas, oil, coal and heating oil … We will not save anything,” Putin said. He also questioned a UN-brokered deal to export grain from Ukraine.

Europe usually imports about 40% of its gas and 30% of its oil from Russia.

Cracked into the EU rankings?

However, there were signs of division among EU members over the price cap scheme. A Czech minister said it should be removed from Friday’s meeting agenda. The Czechs help guide the discussions as the rotating EU Presidency.

“It is not a constructive proposal in my opinion. It is another way to punish Russia than a real solution to the energy crisis in Europe,” the Czech news agency quoted Industry Minister Josef Sekila as saying. Read more

Euroelectric, a body representing the European electricity industry, has also criticized EU plans to put a cap of €200 per megawatt-hour on the price of electricity from non-gas-fired generators.

The root cause of the problem is the lack of gas supplies and our addiction to imported fossil fuels. Christian Ruby, general secretary of Euroelectric, said governments should seek to address this rather than resort to distorting and ad hoc interventions in the electricity market.

The energy crisis facing Europe has become more acute after Russia’s Gazprom (GAZP.MM) All suspended gas is supplied via Nord Stream 1 pipeline to Germany after it said it found an engine oil leak during maintenance work last week.

Putin rejected Western allegations that Moscow was using gas as a weapon to break opposition to the invasion of Ukraine.

The Russian president said German and Western sanctions that affected the supply of spare parts were to blame for the pipeline’s failure to operate.

The impact of higher prices is forcing companies to cut production and governments to spend billions on subsidies to protect consumers from the impact.

About half of aluminum and zinc production in the European Union has been forced out due to the energy crisis, an industry union said on Wednesday, and called on the union to cut costs to prevent permanent closures of metal production facilities. Read more

Register now to get free unlimited access to

(Reporting by Reuters) By Keith Weir; Editing by William MacLean and Carmel Crimmens

Our criteria: Thomson Reuters Trust Principles.

Leave a Comment