EU backs off Russian gas price cap after Putin threat

Ministers from the EU agree to raid energy giants in an effort to ease household financial losses.

After threats by Vladimir Putin to reduce supply, EU ministers have resisted a price cap for Russian gas.

After opposition from certain member states, proposals to limit the price of energy imports used to fund the Kremlin’s war machine has been thrown out.

Putin warned that he would stop energy supplies if there was a limit. Many countries, including Hungary, were exposed to sudden shut-offs and indicated that they would not support the EU plan. In the end, the proposal was dropped during emergency talks.

The EU energy ministers agreed to raid energy giants and offer assistance for power companies affected by volatile markets.

Ministers requested the European Commission to develop more detailed plans to help households offset the impact of rising energy prices.

Also, the EU’s executive arm was instructed to make proposals for a wider price cap that does not only target Russia and to help ease strains in energy markets. As they struggle to meet the massive collateral requirements to secure contracts to insure against wild price swings, power producers are asking for emergency liquidity support.

The plans will be revealed next week. EU members could also approve the proposals later in the month.

Ministers in Brussels are trying to prepare for a difficult winter as Russia cuts off energy supplies and there are growing recession fears.

Eamon Ryan, Ireland’s environment minister, stated that the Commission recommended taking some of the excess profits and redistributing them to the households.

Czech minister of industry Jozef Sikela said that EU members would “do whatever it takes” to help citizens and businesses facing high energy prices.

“We were able to reach a consensus on temporary emergency measures. We gave the Commission a clear task: to present a strong and concrete proposal within a matter of days.

The EU intensified its efforts to address the problem, and gas prices dropped 8% to EUR205 per megawatt-hour in the region on Friday. Despite recent drops, prices remain more than twice as high as they were in June.

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