BRUSSELS (Reuters) – Belgium has backed introducing price caps for European Union’s gas and electricity hubs, as well as suspending trade in case of “irrational market behaviour”, according to a note seen by Reuters on Monday.
The 27-nation EU is looking for ways to tackle soaring energy prices, including discussing price caps for markets spooked by Russia’s invasion of Ukraine and reduced gas supplies to Europe.
Eurostat said earlier this year Belgium had the highest energy inflation in the EU and the government in Brussels tinkered with taxes and tariffs to alleviate the pain on consumers. It has also called for reforms of the EU energy market.
“Price levels for gas trading on European hubs should be capped in order to limit irrational market behaviour,” the Belgian government said in the note.
With LNG terminals and gas pipelines connecting Europe and the world, wholesale prices should not be significantly higher in Europe than at the U.S. Henry Hub or Asia’s JKM, it said.
“If price ceilings are installed in the gas market, the price ceilings in the electricity market must also be revised”, added the note, which also lays out the Belgian government’s stance ahead of talks among the bloc’s energy ministers.
It called for suspension in wholesale trading if necessary and for a review of pricing that currently translates higher gas prices into more expensive electricity, even if the latter is produced from nuclear or renewable sources.
(Reporting by Gabriela Baczynska, Editing by Louise Heavens)