Greece proposes EU plan to curb rising energy prices

Greek Prime Minister Kyriakos Mitsotakis, in a letter to European Commission President Ursula von der Leyen, outlined a proposal for a six-point plan to deal with the economic impact of a sharp rise in energy prices.

In his letter, Mitsotakis emphasizes the need for immediate and decisive action to prevent additional costs for citizens. EUthe EU economy and the successful implementation of the European Green Deal.

Mitsotakis noted that the underlying market prices for natural gas in recent months, especially after December, were no longer determined by the normal forces of supply and demand, citing the results of a recent study by the European Union Agency for Energy Regulators Cooperation (ACER) and the Gas Coordinating Group European Commission.

“In fact, political statements and fears related to the Russian invasion of Ukraine are now playing a decisive role in shaping prices, which lead to uncertainty, huge price fluctuations and speculation,” he said.

“That means we don’t have a quantity problem, but we do have a price problem,” he added.

The plan of the Prime Minister of Greece provides:

  1. Price cap for the Transfer of Title Facility (TTF) using the highest natural gas price before the crisis as a benchmark.
  2. Daily price cap as a protective measure that limits TPP price fluctuations within a fixed range (eg +/- 10 percent).
  3. Setting a cap on gross margins in the wholesale electricity market, possibly in the order of 5 percent, based on monitoring of production costs by market regulators and the levelized cost of energy (LCOE) at power plants.
  4. Permission to trade only with physical delivery within a certain period of time.
  5. Increased liquidity in the natural gas market by merging the EU/US/Asia markets (for example, by expanding the purchase of Russian SNP through China, with possible capping of transportation costs to eliminate incentives for speculation).

Mitsotakis noted that all of the above options were significant market interventions that were previously used in emergency situations for other markets to balance them, and for some markets they are permanent.

The letter was sent on Tuesday, with copies also sent to European Commission Vice President Frans Timmermans in charge of the European Green Deal, European Commissioner for Energy Kadri Simson and European Commission Director General for Energy Juul Jørgensen Ditte.

Prime Minister Mitsotakis held an emergency cabinet meeting on Wednesday morning and said the government would announce some measures to help households and businesses in ten days.

Meanwhile, on Friday, fuel prices reached 2,485 euros on the islands, 2,487 Euro in Samos, 2,200 Euro in Thessaloniki, 2,279 euros in Athens.

At the same time, about 60% of the price of fuel comes from taxes and special charges.

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