Greek prime minister managed to make gas on the European market half the price

In four days, Greek proposals for price regulation reduced the cost blue fuel in the European gas market by 50%, said after the summit EU Greek Prime Minister Kyriakos Mitsotakis.

On March 8, the Prime Minister of Greece, in a letter to European Commission President Ursula von der Leyen, outlined a proposal for plan of the six points to overcome the economic consequences of the sharp rise in energy prices. He insisted on urgent intervention in the situation on the wholesale gas market and proposed a number of measuresamong which:

  1. Price cap for the 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%).
  3. Setting a cap on gross margins in the wholesale electricity market, perhaps in the order of 5%, based on the 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, for 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).

According to Kyriakos Mitsotakis, gas market has long ceased to act according to market rules and is a victim of speculation. He says:

“Point 12 of the (summit) conclusions, at my request, makes direct reference to the EU statement of March 8, which specifically states that a gas price ceiling will be considered as an option among other proposals to be evaluated by the European Union It is significant that only in the last four days, that is, since the publication of my proposal and the statement of the European Commission, the gas market has fallen by 50% from about 220 euros (per megawatt per hour), which was five days ago, to almost 115 euros. I saw it, it was about an hour ago. This is the best proof that this market is not working as normal, that it is speculative, and that this is a problem that we have to solve at the European level. This concerns the gas market.”

At the next European Council, says the Prime Minister, the European Commission was asked to present specific proposals:

“These proposals must be accepted by the Board. The proposals will be made within the next two weeks. And I hope that they will include those that I have, as well as proposals from other colleagues. If these proposals are accepted, we will see an actual reduction in the price of gas”.

Next week, the Greek Prime Minister promised to announce national measures to support the population.

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