Under pressure from European Union member states worried about winter approaching, the European Commission will present Tuesday details of its proposals to control energy prices by dealing with price instability in the gas market.

Faced with deep divisions among the 27 countries in the bloc over the idea of ​​capping prices, Brussels is offering measures "subject to the maximum amount of consensus", as the Commission emphasized.

The proposals, which will be unveiled in Strasbourg, will be reviewed on Thursday and Friday by heads of state and government at a summit meeting in Brussels before their possible adoption in November.

On Tuesday, the Commission will present a reform of the gas market index "TTF", which European operators consider a reference standard for transactions and which, according to it, is "artificially" fueled by speculation. The idea is to replace it within six months with an alternative indicator that is more representative of real supplies.

Until then, Brussels is recommending a "temporary mechanism" to correct gas prices. According to a European source, it will be a "dynamic corridor" (a flexible range in which prices are allowed to fluctuate) to frame transactions in the TTF market, making it possible to mitigate volatility and avoid any sharp rise.

On the other hand, Brussels wants to force member states to agree to joint purchases of gas at the European Union level for the next season to fill stocks in order to obtain better prices from “reliable” suppliers (Norway, the United States...) and to prevent the bloc countries from competition.

EU member states gave the green light in March to launch a common procurement platform, but no deal was struck through it and the countries continued to negotiate unilaterally. Now, the Commission wants to involve the private sector more through a consortium of importing companies.

The Commission will also propose an enhanced solidarity framework for countries at risk of supply shortages, and additional tools to reduce gas consumption: In the face of differing efforts between countries, Germany and the Netherlands have called for "more ambitious and compelling targets".

- 'Determining winter' -

The European economy is suffering badly as Russia cuts back on its supply of hydrocarbons, on which the bloc relies heavily.

But the EU faces great difficulty in finding a common response, with interests diverging between countries, such as France betting on nuclear energy, coal-dependent Germany, or countries tied to Russian hydrocarbons in Central Europe.

On Wednesday, Italy's Environmental Transition Minister Roberto Cingolani summed up the situation, saying, "The prices are crazy: we agree on the diagnosis, but we are still discussing the appropriate treatment."

In this context, the Commission should not propose setting a ceiling on the price of gas that electricity suppliers buy for their thermal plants, according to the European source mentioned earlier. This system, implemented in Portugal and Spain, allows for an automatic reduction in electricity prices.

France supports the idea of ​​expanding it to the rest of the European Union and has pledged to persuade other member states to adopt it. But this mechanism raises the mistrust of countries such as Germany and the Netherlands, which reject state intervention in the markets and fear the risks of increasing demand for gas due to the increased appetite of electricity suppliers.

But during their meeting, the 27 countries may agree to "explore" this measure, according to draft conclusions seen by AFP.

On the other hand, it seems that the idea of ​​capping the prices of gas imports, which was mentioned by the Commission in early November and then demanded by 15 member states, including France, has become forgotten. An idea that Berlin opposed, fearing it would exacerbate tensions in LNG supplies in a limited global market.

At a meeting in Prague in early November, European leaders expressed their concerns about the economic and social consequences of inflation.

"If we don't find a solution, people will end up on the streets, with a weak economy, with bankruptcy and with less popular support for climate policies and aid for Ukraine. This winter will be decisive," Czech Industry Minister Josef Sekila said last week.

 Source: AFP,