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7 Sep, 2022 14:26

EU suggests price cap on US LNG

The measure was floated among other proposals aimed at tackling the growing energy crisis
EU suggests price cap on US LNG

Brussels is examining the possibility of a price ceiling on all gas imported into the EU, including liquefied natural gas (LNG), European Commission President Ursula von der Leyen said on Wednesday.

LNG is scarce and can be rerouted to different regions… We [want to] stay competitive for LNG suppliers but make sure that the prices we pay are not extraordinarily high but in a decent range,” she told reporters. EU countries mostly import the costly LNG from the US and Qatar, using it to diversify gas imports in light of shrinking supplies from Russia. However, some analysts warn that producers might not be eager to supply the fuel to European countries if their profits are capped.

Von der Leyen noted that enacting the proposal is not imminent and that it would be discussed further at a later date.

She did, however, unveil a number of other proposals aimed at tackling the EU's worsening energy crisis, including a bloc-wide plan to reduce electricity consumption, a price cap on the excess revenues made by companies involved in renewable and nuclear energy, a mechanism to capture the profits that fossil-fuel companies make due to rising prices, a state aid program for utilities businesses, and a price cap on Russian pipeline gas imports.

Commenting on the last of these, she said the mechanism is necessary to “cut Russia's revenues which Putin uses to finance this atrocious war against Ukraine.” She noted that since Russia launched its military operation in Ukraine, the share of Russian pipeline gas in the EU’s total imports has dropped from 40% to 9%, while Norway has replaced Russia as the bloc’s leading gas supplier.

For more stories on economy & finance visit RT's business section

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