Article content
(Bloomberg) — The European Union’s planned package to curb surging natural-gas prices must avert an increase in the use of the fuel amid an unprecedented supply crunch, EU energy chief Kadri Simson said.
Article content
The European Commission is due to propose a set of measures Tuesday to alleviate the impact of Russia’s cuts on companies and consumers. Commissioners will discuss possible solutions at an extraordinary meeting on Sunday, Simson told the Cypriot newspaper Politis in an interview.
Article content
While more than a half of the bloc’s 27 member states are pushing for capping gas prices, they are at odds over details of how to do it. The challenge for the EU is to rein in costs while preventing damage to the common market and an increase in demand for the fuel at a time when it wants to reduce its dependence on Russia and ensure sufficient gas storage for the next heating season.
“We cannot plan a measure that will lead to more natural-gas consumption, because natural gas is not available,” Simson was quoted as saying.
Article content
The commission, the EU’s executive arm, has signaled it would weigh whether to put forward legislation that would temporarily cap the price of gas used for electricity generation. While such a limited cap could be modeled on measures taken by Spain and Portugal, it’s contested by some member states.
EU government leaders will next discuss the energy crisis at an Oct. 20-21 summit in Brussels. While they’re likely to endorse measures to strengthen the EU’s resilience and better use its leverage in negotiating gas contracts, a deal on capping gas prices remains elusive, according to diplomats.
Simson also said the OPEC+ decision on Oct. 5 to reduce oil production wasn’t adequately explained. Without the cartel replacing the expected drop in Russian oil output linked to EU sanctions, the global market will face challenges, the EU energy commissioner said.
OPEC has the responsibility to stabilize oil prices as the costs affect not just Europe and the US but also have serious consequences for developing countries in Africa and Asia, Simson told the newspaper.
She said she believes that those cartel members “from regions where their neighbors will be seriously impacted will feel this responsibility and will reconsider their decisions.”