EU’s Gas Price Cap Dispute on Hold For Now With Czech Compromise

(Bloomberg) -- European Union member states will hold off on seeking a compromise on a controversial price-cap mechanism until a technical seminar on the issue takes place next week.  

The Czech Republic, which holds the rotating Presidency of the EU, has drawn up its first compromise text on the Commission’s proposals to operationalize joint purchases and create a complementary liquefied natural gas market benchmark as it looks to tame gas price rises, according to a document seen by Bloomberg News. 

Yet elements concerning the implementation of a dynamic price cap on the region’s Dutch Title Transfer Facility were left untouched due to the “political sensitivity” of the issue ahead of a seminar planned for Nov. 7, the document said.

The EU has a policy of not commenting on leaked documents.

Establishing a price gap on the region’s gas markets has divided member states, with some worrying that it could jeopardize supplies of the fossil fuel to the bloc, boost demand and potentially lead to an effective subsidy on exports to third countries. Designing a mechanism that addresses those concerns is seen as extremely complex.

Member states are aiming to reach a deal on the Commission’s third emergency package of energy measures when they meet on Nov. 24, but it is still unclear if the Commission will propose anything on a price cap before then. There are concerns that any delay could risk that the region is left without a temporary price measure this winter.

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