The European Union intends to create a cartel for general gas purchases in order to reduce gas prices for members of the political association. The EU single buyer intends to carry out the first general purchases as early as next month, Maros Sefcovic, Vice President of the European Commission and former European Commissioner for Energy, said, quoted by Bloomberg.
Šefčović said that 27 EU countries, as well as three European countries that are not members of the bloc, intend to purchase a total of about 24 billion cubic meters of gas over the next three years. According to the official, about 50 largest gas producers around the world are already interested in participating in the tender, which will be held in April. The European Union expects that the first long-term gas supply contracts with companies from the US, the Middle East and Africa will be signed as early as June.
The main task of the cartel is to reduce energy prices in order to reduce the pressure on business and ordinary Europeans. This should reduce inflation and simplify preparations for the new heating season. Moreover, the European Commission believes that the resolution of the energy issue will allow the EU to reverse the economic situation and resume economic growth.
“I believe that we are creating a new system that will increase competition, attract new suppliers and reduce energy prices. Since we started this process, international suppliers have shown great interest,” said Maros Šefčović.
The creation of the cartel is one of the measures promoted by the EU as part of reducing dependence on Russian gas and dealing with the consequences of the energy crisis that the continent is facing as a result of the Russian invasion of Ukraine and the reduction of gas supplies to the EU. Shefcovic is convinced that the creation of a cartel will reduce the price pressure on European businesses and households. According to him, European representatives from the steel, aluminum, ceramic, glass and automotive industries are actively watching the development of the idea.
In the case of a successful first practice, the EU intends to use this procurement method on a regular basis, with new and additional tenders through the electronic platform. The European Commission intends in this way to provide the continent with gas and avoid shortages in the domestic market. Currently, European gas storage facilities are approximately 61% full. A warm winter helped to achieve such a high level, but the European authorities do not intend to relax and rejoice at the successes already achieved.
“I am categorically against any complacency or the feeling that the difficult times of last year are behind us, because we do not know what this year has in store for us. Our price moves are extremely important. We cannot keep our economy competitive at these prices and will lose out to the US and China if we do nothing,” said Šefčović.
Last year, the European Union was forced to take a series of measures to curb the effects of the energy crisis. These included: the introduction of a ceiling on gas prices, an agreement on readiness for rolling blackouts, as well as unprecedented measures to voluntarily reduce gas consumption within the EU by 15%. The leaders in reducing consumption last year were Finland, Lithuania and Sweden, and the cumulative reduction in consumption within Europe amounted to 20%.