Energy crisis: Solz calls for joint initiative to reduce natural gas prices |  LiFO

Energy crisis: Solz calls for joint initiative to reduce natural gas prices |

European intervention to limit natural gas prices was requested by Olaf Solz, at a time when forecasts speak of one of the most difficult winters due to the energy crisis.

EU officials are due to meet in Brussels on Friday to consider next steps, as some experts say the winter could be just the start of a protracted crisis.

At the same time, EU officials are looking for ways to contain rising gas prices, which are putting pressure on governments.

Olaf Solz said he sees it as vital that the EU intervenes to tackle the energy cost crisis, even though the German government appears wary of a price ceiling on natural gas imports.

“We are now making sure to discuss together with the rest of Europe how we can take control of the issue,” the chancellor told MPs in the Bundestag.

Scholz stressed that Germany and other EU countries are currently paying gas prices that are far higher than the actual cost of importing global liquefied natural gas (LNG) via sea routes.

The German chancellor pointed out that the problem lay in the fact that many European countries had to cover the gap by making short-term purchases at the last minute from the world market. Prices for these markets are much higher than usual in local EU trading hubs, partly due to the shock of losing such a large volume of natural gas from Russia.

“The first thing we have to achieve is … that we only have to pay the world market price and that we don’t have to pay the higher prices that are currently required,” Soltz said, without elaborating on how he would this could be achieved.

A German economy ministry official said the EU could seek to lower prices by pooling purchasing power in common gas markets, instead of each EU country and energy suppliers bidding separately for contracts and competing with each other.

“There is an opportunity to influence gas prices through good, structured purchasing behavior,” the official said, adding that German Economy Minister Robert Habeck was trying to make possible “common markets” for gas at the European level.

Soltz-Trasz telephone communication on the energy crisis

The issue of the energy crisis in Europe was discussed by Olaf Solz with the new British Prime Minister, Liz Truss, in their telephone conversation.

The two leaders “agreed on the importance of energy resilience and independence. The Prime Minister underlined the importance of safeguarding democracy and freedom in Europe, as well as protecting countries made vulnerable by Russia’s economic blackmail,” a spokesman for the British Prime Minister said.

Liz Truss also told Olaf Soltz that she wants to expand defense cooperation between the two countries and find a solution to issues surrounding controversial rules governing trade with Northern Ireland in the post-Brexit era, the spokeswoman added.

Ursula von der Leyen: Ceiling on natural gas and solidarity net for citizens

It is recalled that Ursula von der Leyen stated that the Commission proposes a ceiling on the price of Russian natural gas.

“The goal is very clear. We need to cut Russia’s revenue that Putin is using to finance this horrible war against Ukraine,” said Ursula von der Leyen, who explained that capping the price of Russian gas is something that can be implemented very quickly.

“We have worked very hard over the last month to ensure a solidarity net – important for member states – that ensures gas flows where it is most needed.” At the same time, “the EU has secured other suppliers for the supply of natural gas, so that it can no longer be blackmailed by Putin,” said the President of the Commission, noting that Moscow has already completely or partially cut off natural gas in 13 member states. “The best thing for us to do is to strengthen ourselves, go to other suppliers and have solidarity with each other,” he added.

Asked whether the Commission is considering imposing a price cap on other energy suppliers, e.g. LNG which is also expensive, Ursula von der Leyen replied that it is an option that is on the table and the Commission is considering it.

However, he noted that this should be done in a way that the EU does not pay extremely high prices, but at the same time remains competitive for LNG suppliers so that they do not turn to other parts of the world.

With information from Politico & APE-MPE

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