EU drops plan to cap Russian gas prices

STORY: The EU has dropped plans to cap the price it pays for Russian gas.

Energy ministers from the bloc met Friday (September 9) in Brussels.

They scrapped plans for the cap after the idea failed to win broad support.

Member states in central and eastern Europe who still get gas from Russia feared retaliation by Moscow.

Russian President Vladimir Putin had said he would cut off supplies altogether if a cap was imposed.

However, ministers did agree to claw back revenues from some power producers, and will use the money to curb consumer bills.

European energy prices are typically set by gas plants.

That leaves generators using nuclear, wind or coal raking in revenue, as their running costs haven’t risen as much or at all.

On Friday, some EU nations also argued in favor of a general cap on all gas imports.

However, European energy commissioner Kadri Simson said any such move would be risky:

“The general price cap, including LNG imports, could present a security of supply challenge, because the LNG market is a global market. We are not among the three biggest LNG-importing regions or countries, and there is very strong competition in the LNG market and right now it is very important that we can replace the decreasing Russian volumes with alternative suppliers.”

The EU windfall plan will now be fleshed out in the coming days, with another meeting of energy ministers seen possible later in the month.