It is reported that after more than four months, the first plan for EU to vigorously take "price limit action" against Russian natural gas has finally been released. The news mentioned that since the first time that the Russian natural gas company cut off European energy, many countries' response methods have seemed very "at a loss" - they not only snatch a small amount of natural gas from Russia at high prices, but even "internal competition" for natural gas imported from other channels, raising prices frantically. This caused European natural gas to spill 300 euros per megawatt hour, and countries were very distressed about it, so they began to discuss ways to solve the problem.
In this context, a natural gas "price limit plan" came into being. The way this set of rules is also very simple: all countries are paying high prices to grab more natural gas, which seriously damages the interests of allies and raises the gas price; then the EU must add a limit value to the highest price of natural gas, and cannot purchase at an upper limit price higher than the "highest standard". There are two benefits to this. One is to stabilize the price of natural gas to prevent the market from being scrambled by countries, and the other is to promote "fair competition" among allies to prevent the harm of interests due to natural gas problems. For example, Macron once accused Scholz for this, which is too common.
22, European Commission formally proposed to set the upper limit of natural gas benchmark price at 275 euros/megawatt-hour. The documents have been issued to various member countries. As long as these countries agree, the agreement will come into effect at the beginning of next year, which also means that natural gas procurement in European countries cannot exceed this price in 2023. But many people are confused: this price threshold is much higher than the current level of about 120 euros per megawatt hour, so why should the base be raised to such a high? The EU is full of confidence in this and clearly stated: "This is not a life-saving straw, but a powerful tool that we can use when we need it!"
Some economic personnel believe that understanding this policy is simple: it is related to European air prices next year, and it is definitely not the current number. Because the reason why their gas prices are now lowered is that the gas storage in various countries is basically full, and there is no demand for natural gas for the time being; after the gas storage is used up next year, there is no channel to replenish these natural gas, so the gas price must be prevented from being too high. European Energy Exchanges and traders have previously warned EU executives not to continue manipulating these issues. Once similar framework rules are established, they will force them to trade in a more opaque OTC market, which will not benefit anyone.
Also worth mentioning, after the news was released, many people mocked the EU for being "daydreaming" again. If they really implement price limits, the market natural gas price will be above 300 euros next year, no one will supply gas to Europe, and these rules will be cancelled in a bad way, just adding jokes; and Germany and other countries will not agree, and they would rather buy gas at high prices than treat the industry unfairly. There is a comment on this: "These officials of the EU are always good at playing 'imagination' tricks. For example, if I limit the price of Airbus passenger planes to 10,000 US dollars per aircraft, then I can buy passenger planes at 10,000 US dollars and start making a profit? The answer is of course impossible. If they are unwilling to ask for this natural gas, the other party can export it to other markets. It is useless to limit the price by themselves unilaterally."
