Spain, France slam EU gas price cap proposal as a "joke," "insufficient"

The European Commission's proposal to introduce a €275/MWh price cap on front-month gas supplies at the Dutch TTF gas hub has been slammed by Spain and France as ineffectual.

EU member states have been debating the introduction of a cap on wholesale gas prices for months, but progress has been slow, over disagreement about what form the mechanism should take. 

The commission suggested on November 22 that a "safety price ceiling" of €275 ($286)/MWh should be introduced for front-month TTF derivatives. But critically, the mechanism will only be triggered when the €275/MWh threshold is exceeded for two weeks, and if TTF prices are €58/MWh higher than the LNG reference price for 10 consecutive trading days within the two weeks.

Spanish ecological transition minister Teresa Ribera described the commission's proposal as a "joke," saying it would cause steeper price hikes and undermine efforts to quell inflation. Most EU member states are against the idea, she added. Member states are due to meet to discuss the proposal on November 24. Spain could withdraw support for other proposals if the commission does not take a "serious" look at the plan, Ribera said.

Meanwhile, the French energy transition ministry has described the cap proposal is "insufficient," warning that it "does not respond to the reality of the market."

Experts too have said the proposed cap is too high, given that even during the record gas price spike in late August, prices did not remain above €275/MWh for two consecutive weeks.