Controversial gas price cap deprives the EU of a major advantage over Asia


After months of negotiations, the EU has finally agreed to set a cap on natural gas prices, with the aim of protecting consumers from excessive price hikes, trying to limit inflationary pressures and industrial damage to the European Union. economics. Analysts say the price cap could limit Europe's ability to continue to get the bulk of the world's LNG supplies on the spot market. OilPrice writes about this.


Some EU member states, such as Germany and the Netherlands, have had reservations about the controversial price cap as they remain concerned that market intervention and a cap would deprive Europe of a key advantage in attracting LNG supplies this year - higher prices than in Asia.

Germany agreed to support the price cap only after the EU also allowed faster paperwork for renewable energy projects, EU officials said.

Against the background of signs of growth in demand for raw materials from Asia, limiting gas prices in the EU may bring more risks than benefits. In Europe, this is well understood, since on Monday during the procedure for the adoption of the restriction, it was announced that it would be suspended if the risks outweighed the benefits.

Traders and suppliers in Europe have so far been attracted by the determination of buyers, as well as the flexibility of contracts and market conditions. Now these factors have been completely eliminated, exhausted customers, exhausted by the crisis, and tight price controls will make the EU an unwanted buyer for spoiled by unreasonably high prices of sellers from across the ocean.
  • Photos used: pixabay.com
4 comments
Information
Dear reader, to leave comments on the publication, you must sign in.
  1. Irek Offline Irek
    Irek (Paparazzi Kazan) 22 December 2022 08: 42
    0
    But they don’t need gas, they returned to the cave age ...

  2. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 22 December 2022 09: 27
    0
    Horror. And how will they live there? they will freeze again and die out ... the 3rd year will be undermined ....

    Next to it are articles, like all sorts of Kazakhstans, Turkeys and Azerbaijanis dream of laying pipes to Europe ...
    And to Asia? And they almost never dream of going to Asia ....

    There is no main. Dachas, palaces, apartments, and hotels of our, Central Asian, Azerbaijani oligarchs ...
    And in Europe - there is.

    PS. In the photo about Paris, the houses are the spitting image of high-rise buildings of the USSR .... just one to one ... smiled ...
  3. prior Offline prior
    prior (Vlad) 22 December 2022 11: 01
    0
    The price "ceiling" for oil and gas for Russia should become a "floor", from the level of which it is possible to start trading with countries that have established "ceilings".
  4. Jacques sekavar Offline Jacques sekavar
    Jacques sekavar (Jacques Sekavar) 22 December 2022 11: 15
    0
    China's cancellation of the zero tolerance policy leads to economic growth and, as a result, energy consumption - the question is at what prices. It is likely that % is slightly lower than the world prices, and it is this price that will become a benchmark for the EU in setting a price ceiling, the adoption procedures of which will be suspended if the risks outweigh the benefits.
    Shasovskaya strategy considers the PRC as the main competitor, and allowing the main competitor to receive energy from the Russian Federation at lower prices is an unaffordable luxury.
    The precedent of non-market price regulation can be extended to any other goods of unfriendly state formations, which will violate the fundamental principle of all world trade, and nothing in return.