The EU will propose a price limit for Russian gas

The EU will propose a price limit for Russian gas

EU will propose price caps for Russian gas

Head of the European Commission Ursula von der Leyen (file photo)   EU to propose price cap on Russian gas

EU energy ministers to discuss the issue at an emergency meeting on Friday

The European Commission will propose a cap on Russian gas prices along with measures including mandatory cuts in EU electricity consumption and revenue caps companies using gas to generate electricity.

European Commission President Ursula von der Leyen said on Wednesday.

“We will propose a cap on the price of Russian gas… We must cut Russia's revenues, which Putin is using to finance this brutal war in Ukraine,” the head of the European Commission told reporters.

EU energy ministers will discuss proposals at the Friday's emergency meeting.

Russian President Vladimir Putin said Wednesday that Russia would cut off gas and oil supplies if price ceilings were introduced.

However, there are signs of disagreement among EU members over the price cap plan. One of the Czech ministers said that this issue should be removed from the agenda of Friday's meeting.

“In my opinion, this is not a constructive proposal. Rather, this is another way to impose sanctions on Russia than a real solution to the energy crisis in Europe,” Minister of Industry Józef Sikela was quoted by the Czech news agency CTK.

Von der Leyen spoke about the upcoming emergency measures to reduce skyrocketing gas and electricity prices. The EU is aiming to cap the revenues of companies that don't use gas to generate electricity and redirect their “surprise profits” to support households and businesses, she said.

Electricity prices in Europe are usually set by gas-fired power plants and the cap will aim to reduce the cost of electricity generated by wind farms, nuclear power plants and coal-fired power generators, which have lower operating costs because they are not subject to gas price shocks.

According to von der Leyen, oil and gas companies, which have recorded a huge jump in profits, will also be required to pay a “solidarity contribution”, without giving details.

Other measures that Brussels will propose include requiring countries to reduce electricity consumption during peak hours, and See also measures to maintain the liquidity of enterprises facing huge collateral requirements.