Gas price ceiling: Greece opposed and made its own proposal

Greece does not agree with the EC’s proposal to set a natural gas price ceiling of 275 euros per MWh. She intends to seek the development of a new initiative together with other EU countries.

This was stated on Monday at a briefing by the official representative of the Greek government, Yannis Ikonomou. He said that the Council of Energy Ministers of the countries EU failed to agree on an EC proposal to set a price ceiling for natural gas at 275 euros per MWh (approximately $3,000 per thousand cubic meters). Greece has proposed a ceiling of 150-200 euros per MWh (1600-2100 dollars per thousand cubic meters), by convening a coordination meeting of 15 energy ministerswho decided to speak on December 13 with a common position at the new Extraordinary Council of Energy Ministers.

During the briefing, the journalist asked whether the Greek government insists on its clarification of the ceiling for the wholesale price of natural gas, and whether it is ready to accept the adjusted one, which is between its own proposal and the proposal of the European Commission. And what does Greece intend to do if there is no agreement. To which Mr. Iconomou replied:

“The Greek side has clearly stated its position regarding European intervention and the price cap. It is clear that the proposal of the European Commission to set a price cap of 275 euros does not suit us and does not serve either the stated goals or the ambitions of European citizens. We will continue with other countries pressure to come up with a proposal that will work.The government, regardless of the decision of the EU, has a concrete plan to support society, and the Greeks pay for energy much less than the European average.I think we have the second cheapest price.And we will continue to move in this direction. We will return the super profits of the electricity producers, and through these super profits we strengthen the Greek society, every Greek, every household and enterprise. To reduce the cost of living.”

Recall, on November 22, the EC proposed the creation of a temporary mechanism for adjusting the gas market in the European Union as another measure to combat the energy crisis. The Commission hopes that the mechanism will help reduce volatility in the gas market, protecting EU residents and businesses from sharp increases in gas prices. The mechanism will be launched if two conditions are met simultaneously: the settlement price of a monthly futures contract on the TTF index exceeds 275 euros per MWh for two weeks (slightly more than 2.8 thousand dollars per thousand cubic meters of gas at euro-dollar parity), and the spread between the price TTF and the global LNG price is at least 58 euros for 10 consecutive trading days. When the mechanism is in place, transactions at a price higher than 275 euros will not be made.

In the market, even before the announcement of the level of the price limit for natural gas, there were fears that the launch of the mechanism would pose a threat to the financial stability of the EU. The Association of European Energy Exchanges Europex noted that if the real price of gas exceeds the artificially limited price for the TTF futures for a month ahead, market participants will immediately transfer trading to the bilateral over-the-counter space. Such a move will lead to a significant reduction in the transparency of transactions and create serious risks to financial stability.

The President of the Russian Federation, commenting on the idea of ​​the West to limit prices for Russian energy resources, stated that Russia would not supply anything abroad if this would be contrary to its own interests. Alexander Novak, Deputy Prime Minister, pointed out that the Russian Federation will also not supply oil to countries that will set a price ceiling – neither at $60 per barrel, nor at any other cost. He added that such restrictions are interference with market instruments. Russia intends to work with those consumers who are ready to work on market conditions, writes GreekReporter.

Earlier, our publication wrote that the Greek government and its head Kyriakos Mitsotakis are in favor of establishing gas price limit from all sources, not only from Russia.

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