Proposed cap for wholesale gas prices
Letter from Europe: Retail gas market intervention safer than wholesale
The EU’s proposals to cap wholesale gas prices could result in unintended consequences
The European Commission has an impossible task: to advance a legislative proposal that seeks to limit upside to gas prices without simultaneously endangering security of supply. Any price cap is market distortionary by nature and entails very significant risks as it can limit Europe’s ability to attract LNG. Additionally, a cap set at or below market prices could curtail the market’s ability to trigger the demand reductions necessary to inject enough gas into storage over the course of next summer in preparation for winter 2023–24. As a result, there are only two ways in which a price cap could be implemented while still limiting its dangers to Europe’s security of supply. One option would b
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