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European Union energy ministers are set to meet on Monday to discuss ways in which they can jointly curb gas demand as the bloc attempts to wean itself off from Russian supplies.
“I plan to present to ministers the concrete steps that I believe we have to make, both at member states’ side and the Commission’s side, to be better prepared,” the EU energy commissioner Kadri Simson said.
On Sunday, a proposed price cap on Russian oil and pipeline gas moved closer gathering the support of G7 leaders who are meeting in Bavaria this week. The twin caps were introduced by Italian prime minister Mario Draghi during Sunday’s opening meeting and had already gained the support of French president Emmanuel Macron.
The gas cap would operate simply by European countries refusing to pay above a fixed price (yet unspecified) for Russian gas. It is estimated that Russia, in the short term, has no alternative market to sell its pipeline gas at and unless the country is prepared to take a huge hit to its revenues by shutting down its pipeline altogether it would have no option but to accept the European Union’s proposal.
“Putting a ceiling on the price of fossil fuels imported from Russia has a geopolitical goal as well as an economic and social one. We need to reduce our funding to Russia. And we need to eliminate one of the main causes of inflation. We must avoid the mistakes made after the 2008 crisis: the energy crisis must not produce a return of populism,” the Italian prime minister told G7 on Sunday.
“We must mitigate the impact of rising energy prices, compensate families and businesses in difficulty, and tax companies that make extraordinary profits.”
Oil prices opened slightly higher on Monday with Brent Crude futures 0.44% higher and valued at $109.65 a barrel meanwhile West Texas Intermediate (WTI) futures rose by 0.28% costing $108.00 a barrel.
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