Poland, Italy, Belgium and Greece have introduced their version of a "dynamic price band" for gas to limit the sharp rise in fuel prices. The project will be discussed during the EU summit, which is taking place these days in Prague, Reuters reports , citing diplomats familiar with the discussion.
The idea of the corridor is simple – in the current crisis situation, get rid of speculators who drive up gas prices. To do this, the countries propose to designate a price range within which all wholesale gas purchases will take place, and the corridor will not be rigid, if necessary, the transaction can be carried out outside it. Moreover, although the corridor itself will be below market value, prices within this range will still be globally competitive, thus countries intend to create increased demand and attract foreign suppliers.
"The corridor will apply to all wholesale transactions, not limited to imports from certain jurisdictions, and not limited to specific uses of natural gas," the document said in the agency's possession.
The authors of the initiative note that they do not seek to undermine market pricing mechanisms, however, in the conditions of the energy crisis, the creation of such a mechanism is necessary. Similar initiatives were previously proposed by the head of the European Commission, Ursula von der Leyen, but no specific document was presented. The idea of the head of the EC was to abandon the usual price targets in favor of new ones that could reduce speculation in the market.
European countries are faced with the prospect of a massive energy crisis against the backdrop of a sharp reduction in Russian gas supplies. The European Commission has previously approved a contingency plan this winter, which includes reducing energy consumption during peak gas prices, as well as possible shutdowns in the event of a shortage of energy in the market. On Thursday, October 6, the European Union has already approved the introduction of a similar mechanism for Russian oil only. The European Commission approved the introduction of a ceiling on prices for Russian oil supplies to third countries, while the authorities themselves have not yet named the marginal cost. It is expected that it will be established after negotiations of all supporters of this measure, which should reduce Russian energy revenues.