UPDATED: EU’s von der Leyen to press EU leaders on gas price cap

BRUSSELS, Oct 5 (Reuters) – European Commission President Ursula von der Leyen will impress upon EU leaders meeting this week the need for a gas price cap and to ensure any financial support measures allow fair competition.

EU governments have debated a gas price cap for weeks, without reaching agreement. While a majority of EU members support some form of cap, Germany, Denmark and the Netherlands are opposed, citing concerns over security of supply.

In a speech to the European Parliament in Strasbourg, the EU executive chief said she would lay out a roadmap in a letter to the leaders who will gather in Prague from Thursday.

Von der Leyen said the European Union had to ensure individual members did not outbid each other for gas on world markets and drive prices up.

She also said the EU needed to step up its negotiations with trusted partners and look into joint procurement, beginning with gas used to generate electricity.

For gas in general, von der Leyen proposed a temporary solution in the form of a cap until a new EU price index was in place. The main TTF price benchmark was guided by pipeline supply and no longer representative of a market that includes more liquefied natural gas, she said.

“It is a temporary solution until a new EU price index ensuring a better functioning of the market is developed. The Commission has kick-started work on this,” she told lawmakers.

Von der Leyen said the energy crisis required exceptional measures, but it was paramount that the EU preserve a level playing field.

The Commission has said it is in talks with Germany about its 200 billion euro ($198.8 billion) support package that critics say threatens to distort competition in the bloc.

Von der Leyen said it should boost its REPowerEu plan to reduce dependence on Russian oil with extra funds.

Hungary says new EU price cap on Russian oil will not apply to pipeline shipments

Hungary, which has been the most vocal critic of sanctions against Russia in the EU, largely relies on Russian crude shipments and Russian gas, both imported via pipelines.

Hungary, one of the European Union’s most-reliant members on Russian energy, aims to eliminate Russian gas imports by 2050 by a large-scale electrification drive, Technology and Industry Minister Laszlo Palkovics said on Tuesday.

Under a 15-year deal signed last year, before the start of the war in neighbouring Ukraine, Hungary receives 4.5 billion cubic metres (bcm) of gas per year via Bulgaria and Serbia under a long-term deal with Russia.

In July, nationalist Prime Minister Viktor Orban’s government scrapped a years-long cap on utility prices for higher-usage households, which Palkovics said would likely contribute to a decline in retail gas consumption.

Palkovics said the government would review Hungary’s energy strategy in the first quarter of 2023, looking to curb gas reliance and boost electricity production relying on nuclear and solar energy as well as a possible move towards wind farms.