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Viewpoint: EU Gas Price Cap Proposal Ignores Supply Question

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The proposal by the European Commission to implement a price cap on the Dutch TTF, Europe’s benchmark gas hub, continues to ignore that the underlying problem of Europe’s energy predicament is a supply shortage. Once again it must be said that instead of shortsighted political wins by distorting the market via policy interventions, Brussels should look at solving the long-term supply security question and support it with effective demand-side measures until incremental volumes can be found. A focus on attracting supply, ensuring liquidity, guaranteeing a level playing field among countries, and eliminating regulatory and physical congestion points across the bloc would be infinitely more effective than intervening and constraining a market that works well and responds to fundamentals effectively. This should be the focus of a Nov. 24 meeting by EU energy ministers, which could decide the fate of the gas price cap.

Topics:
Gas Supply, Gas Prices, Gas Demand, Gas Inventories, Gas Futures and Derivatives, Gas Spot Markets, LNG Supply, LNG Trade, LNG Prices, Policy and Regulation, Ukraine Crisis
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