The European Union’s executive arm has proposed a year-long gas price cap of €275 per megawatt hour on the Dutch benchmark, as the West pushes to tame energy bills and slash Russian war revenues.
The cap would run across the 2023 calendar year, confirmed EU energy commissioner Kadri Simson.
She said: “We propose to put a ceiling on the TTF (Title Transfer Facility) gas price to protect our people and businesses from extreme price hikes.
“The mechanism is carefully designed to be effective, while not jeopardising our security of supply, the functioning of EU energy markets and financial stability.”
The Commission’s latest proposal will be debated by energy ministers from the bloc’s 27 member countries on Thursday later this week.
The push to cap prices has divided EU countries for many months, with discussions beginning initially this summer.
Ministers will now discus the formula of the cap, the exact ceiling level, as well as the size of the gap between Dutch benchmark prices and global LNG prices.
Earlier this year, 15 member states had been pushing for, which had been opposed by Germany, Austria and the Netherlands over concerns of shortages and failures to incentivise saving energy.
The continent faces record energy bills across European households, while the bloc has spent €117bn on Russian fossil fuels since the invasion of Ukraine in February.
It has since announced plans to phase out coal and seaborne oil shipments from Russia, but has not managed to reach an agreement over a potential gas price cap.
Gas prices remain historically elevated on the Dutch TTF Futures benchmark, even if spot markets have eased following the EU’s successful topping up of gas supplies ahead of winter,
Prices are currently trading at €116.12 per megawatt hour, well above conventional market levels of €40-50.