EU Gets Closer to Gas Cap But Still Haggling Over Price

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(Bloomberg) — European Union nations decided to postpone a decision on key details of a price cap on natural gas after a group of nations led by Germany called for more scrutiny of the controversial measure.

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Nations agreed on 90-95% of what was discussed on Tuesday but the “big symbolic” decisions will be left until another gathering on Dec. 19, according to Germany’s economy and energy minister Robert Habeck.

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The Commission’s original cap of €275 ($290) a megawatt hour could be lowered to €160-€220, according to a document seen by Bloomberg. That’s still a good way above current benchmark levels of about €137 a megawatt-hour.

The aim of the cap is to help prevent costs from spiking out of control as happened in the summer when prices jumped to a record €345. Surging energy costs are causing double digit inflation in countries across the region including the bloc’s biggest economy Germany. With limited supplies of pipeline gas from Russia to help refill storage next year, policy makers and analysts are expecting high prices to persist next year.

The plan to intervene in the market, unveiled by the European Commission last month, has caused a deep rift among member states. Countries led by Germany, the Netherlands and Denmark were calling for a cautious approach, while a group including Belgium, Italy, Greece and Poland were pushing for a more aggressive tool.

After months of wrangling and divisions within the bloc

With the gap between EU nations too deep to bridge on Tuesday, a partial compromise is a more politically attractive option than a no deal at all.

(Updates with German minister comment in second paragraph.)