Malta opposing plans for gas price cap at EU level

Malta is opposing plans at EU level for a gas price cap, with Energy Minister Miriam Dalli citing next-to-impossible criteria to trigger the price cap mechanism.

European Union energy ministers convened on Thursday to discuss a proposed gas price cap at €275 per megawatt hour (MWh).

But ministers locked horns during the discussion, with a swathe of member states – including Malta – pointing to several flaws in the mechanism’s design.

Dalli told MaltaToday that the proposed mechanism makes it next to impossible for this correction to be triggered in the first place.

“Not even in August, when we were at the peak of the crisis, did we have these criteria in place,” she told this newspaper.

For gas prices to be capped at €275 per MWh, gas prices must exceed €275 per MWh for two weeks running and the Title Transfer Facility price in Europe must be €58 higher than the global LNG price for 10 consecutive days.

These criteria “make it even more improbable, if not impossible, to actually trigger this so called ‘market correction mechanism”, Dalli told her European counterparts.

Other countries, including Italy, Spain, Slovenia, Slovakia, Belgium and Poland, are against the mechanism as proposed.

Germany, Netherlands, Sweden, Augstria and Finland said that the cap risks shifting gas supplies elsewhere while reducing incentives to lower consumption locally.

Dutch minister Rob Jetten said the proposal is highly flawed. “There is a lot of risk for damaging the energy security of supply, and also for stability of the financial markets.”

Greek Energy Minister Konstantinos Skrekas suggested a cap of €150-200 per MWh as a more realistic figure. “It could help reduce gas prices and therefore electricity prices, which will be a major challenge in Europe this winter.”