Italy's Energy Minister Criticizes European Commission's Proposal On Gas Price Cap

ROME (UrduPoint News / Sputnik - 24th November, 2022) Italian Minister of the Environment and Energy Security Gilberto Pichetto Fratin said on Wednesday that the European Commission's (EC) proposal of a gas price ceiling seemed inefficient and would not deliver the desirable outcome.

"This is not enough. On the contrary, there is a possibility that it will stimulate speculation instead of becoming an instrument for its curbing," Pichetto Fratin said on air on SkyTg24.

He added that EU energy ministers would discuss this proposal on Thursday, and Italy might change its stance after the negotiations, but he was not satisfied with the proposal at the moment.

Italian Minister of Economic Development Adolfo Urso, in turn, said that the regulatory instrument promised much but delivered little.

Earlier in the day, the Association of European Energy Exchanges Europex and the European Federation of Energy Traders, in turn, noted that the EC's regulation mechanism might threaten the financial stability of the European Union.

According to reports, the proposal instantly created divisions between EU members, thus energy ministers are unlikely to reach an agreement on Thursday.

On Tuesday, the EC presented a Market Correction Mechanism to curb extreme gas price surges in the European Union. The mechanism implies a price ceiling of 275 Euros ($283) for gas futures on the Title Transfer Facility (TTF), which is a virtual trading hub for natural resources used as a price benchmark in the EU. The ceiling will be activated only if two criteria are met: first, the gas price exceeds 275 euros for two weeks and, second, the spread between the TTF price and global liquefied natural gas (LNG) price is 58 euros ($60) or more for more than 10 trading days.