EU countries set up gas cap to counter energy crisis

GasBuddy head of petroleum analysis Patrick De Haan forecasts the national average for regular gas to drop 32 cents per gallon in December and the price of diesel to retreat even more on ‘Varney & Co.’ Amid an ongoing energy crisis and two months of negotiations, the energy ministers for the European Union agreed to a gas price cap on Monday. The cap will be effective for 27 countries across the continent as officials hope the measure will help drive down energy amid record-high inflation costs caused by the lack of Russian gas following the invasion of Ukraine earlier this year. Ministers have set the cap to activate if energy prices surpass 180 Euros, equivalent to $191.11, per megawatt hour for three days, according to Reuters. The benchmark for the prices is based on the Dutch Title Transfer Facility. Moreover, the cap will trigger if prices are 35 Euros higher than a reference price for liquid natural gas for three consecutive days. DIESEL HITS RECORD PREMIUM OVER GAS, OIL The energy crisis in Europe was caused earlier this year after Russia suspended gas supplies following its invasion of Ukraine. (iStock / iStock)”We have succeeded in finding an important agreement that will shield citizens from skyrocketing energy prices,” said Jozef Sikela, an energy minister for the Czech Republic, during a press conference. “We did our job, we have the deal. Another mission impossible accomplished,” Sikela added in a statement to members of the press. OIL MARKET FACES ‘CONSIDERABLE UNCERTAINTIES,’ OPEC WARNSStarting on Feb. 15, 2023, the cap will be able to be triggered under the previously mentioned price conditions. The other EU member states will formally approve the measure. Previously, officials from Germany had raised concerns that the policy cap would make Europe less attractive to gas suppliers in the global markets. However, officials did agree upon certain safeguards that would suspend the cap if gas supplies ran short or if it caused a significant drop in TTF trading. CLICK HERE TO GET THE FOX BUSINESS APP

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