The European Commission on Wednesday presented a package of measures to deal with high electricity prices, due largely to the conflict in Ukraine, which are suffocating both individuals and companies.
Among the proposals, which the bloc’s energy ministers will discuss on Friday, include a mandatory saving in electricity consumption of “at least 5%” in the hours of greatest demand, setting a price limit on Russian gas and imposing a cap on income from electricity companies.
As winter approaches and electricity prices continue to skyrocket in Europe, European Commission President Ursula Von der Leyen said the bloc is facing an “extraordinary situation.”
“Not only because Russia is an unreliable supplier, as we have seen in the last days, weeks, months; but also because Russia is actively manipulating the gas market”, accused the German diplomat.
With the aim of reducing gas costs and economically weakening the Kremlin, the main measure that the Commission put on the table is to limit the price of Russian gas.
“The objective here is very clear. We all know that our sanctions are deeply affecting the Russian economy, with a strong negative impact. But Putin is partially dampening income through fossil fuels,” Von Der Leyen detailed. “So here the goal is to cut Russia’s income, which Putin uses to finance his atrocious war in ukraine”.
At the same time, the official celebrated that currently only 9% of the gas imported by the bloc is of Russian origin, while at the beginning of the war between Russia and Ukraine, Russian pipeline gas represented 40% of all imported gas. .
saving measures
Likewise, Von Der Leyen proposed to reduce electricity in the hours of greatest demand.
“We have to save electricity, but we have to save it intelligently. If you look at electricity costs, there are spikes in demand. And this is what is expensive, because, at these peaks in demand, expensive gas comes onto the market. So what we have to do is flatten the curve and avoid peaks in demand,” he assured.
Among the battery of measures, the Commission also proposes to limit the income of energy companies that produce “low-cost electricity” and have obtained “massive profits” due to the increase in prices, and that fossil fuel companies be impose a “solidarity contribution”.
Finally, Von der Leyen pointed out that the bloc will provide “liquidity” to energy companies “which must be supported to face the volatility of the markets.”
For his part, during an economic forum held on Wednesday in Vladivostok, Russia, President Vladimir Putin said that European calls to limit the price of Russian gas were “stupid” and would lead to a rise in world prices and economic problems in Europe.
Russia would abandon its supply contracts if the West goes ahead with its plans, the president warned. “We will not supply gas, oil, coal, heating oil, we will not supply anything,” he said.
G7 member countries already announced plans last week to impose a price cap on Russian oil exports, in a move that could also restrict Russia’s ability to source tankers and insurance from non-G7 countries.
* With information from Reuters.
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