Spain’s Sanchez says EUMED will push for dynamic gas price cap

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ALICANTE, Spain, Dec 9 (Reuters) – The leaders of the nine Mediterranean countries in the EU agreed on Friday to push for a dynamic cap on gas prices rather than a fixed ceiling, Spanish Prime Minister Pedro Sanchez said.

“We will work in that direction so we (EU) can agree on a dynamic and efficient cap on gas prices,” he said, without specifying, after a summit of the nine countries in the Spanish city of Alicante.

Before the summit Spain had proposed a dynamic cap, which suggests a fully-fluctuating price cap, based on average liquefied natural gas prices plus a price premium.

Another proposal has been drawn up by a group of EU countries, including EUMED countries Italy, Greece and Slovenia, for a dynamic value that was 75% fixed and 25% fluctuating in response to existing LNG price benchmarks. 

EU countries’ energy ministers aim to approve a gas price cap at a meeting on Dec. 13, when EUMED has been expected to present its joint proposal.

EUMED also groups France, Croatia, Cyprus, Malta and Portugal.

EU gas prices have soared this year as Russia slashed gas deliveries to Europe following its invasion of Ukraine.

The European Commission last week proposed a gas price cap that would kick in if the front-month Title Transfer Facility (TTF) gas price exceeded 275 euros ($289) per megawatt-hour for two weeks and was 58 euros higher than a liquefied natural gas reference price for 10 days.

Some countries criticised that proposal, suggesting it was designed with such a high price and with criteria so strict that the cap would never be triggered, and thus fail to cushion their economies from price spikes.

(Reporting by Belen Carreno and Andrei Khalip; Editing by Susan Fenton)

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