Russia refuses gaz price dictatorship

Brussels 19.12.2022 “This is a violation of the market pricing process, an encroachment on market processes. Any references to the “ceiling” are unacceptable,” the Kremlin spokesman Dmitry Peskov (pictured) said to the reporters, reacting upon the EU Energy ministers decision to create a cartel of gas buyers to dictate price of Russian natural gas.

The EU countries have agreed on a dynamic gas price ceiling of €180 per MWh (approximately €1.85 thousand per thousand cubic meters), which will apply from February 15, 2023. This is stated in a statement issued by the EU Council on Monday, December 19.

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“The gas price correction mechanism can be activated from February 15 under two conditions: if the gas price holds for three days at the level of €180 and if the difference between TTF (EU) prices and the average world price for liquefied natural gas is more than €35 “, the document says.

The corridor for setting prices for futures will be limited to the mark, which is equal to the average price of LNG on the world market plus €35. It will be impossible to place trading positions above this mark with the current price correction mechanism.

“Thus, this mechanism does not set a hard price ceiling, but it will prevent the occurrence of sharp jumps in gas prices,” European Commissioner for Energy Kadri Simson said at a press conference in Brussels.

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