EU fails to agree on natural gas price cap

Nations in the European Union have again failed to agree the details of a proposed price cap on imported natural gas.

Energy ministers from the bloc's 27 member countries met in Brussels, Belgium on Tuesday, to talk about the global energy crisis, which has hit Europe particularly hard, and to discuss possible solutions to the fast-rising cost of natural gas.

After eight hours around the table, they failed to agree on the specifics of a possible price cap, although they did coalesce around a framework for a mechanism.

Jozef Sikela, the Czech Republic's energy minister and chairman of the meeting, said some countries wanted to be cautious.

"As this is extremely sensitive and as some of the countries believe that, if we are wrong with the mechanism, it can cause a much bigger problem … (They) feel the need to have more of a discussion with experts," the Financial Times newspaper quoted him as saying.

Robert Habeck, Germany's minister for economic affairs and climate action, agreed, saying: "It makes sense to take a little bit more time, to take a step back and make sure we didn't make any mistakes."

The issue was on the table because of the soaring price of energy globally, triggered largely by supply issues resulting from the Russia-Ukraine conflict, the EU's desire to wean itself off Russian fossil fuels, and damage to the Nord Stream undersea gas pipelines.

Some EU nations — including Belgium, France, Greece, Poland, and Spain — said an EU-wide price cap on gas imports, through which nations would say they will pay a certain price and no more, would drive down the price globally. But other countries, including Germany and the Netherlands, which are heavily reliant on gas imports, said they could be starved of global gas supplies if the price cap simply prompts sellers to take their gas elsewhere.

The European Central Bank has also warned that a price cap could potentially "jeopardize financial stability in the euro area".

The issue is compounded by the fact that Europe has insufficient gas reserves, with the International Energy Agency estimating the bloc could fall short next year by as much as 30 billion cubic meters, which is enough to power the Netherlands for a year.

The bloc has now discussed the idea of a price cap on five occasions, and plans to revisit it again on Monday.

The Reuters news agency said the EU is hopeful it may be able to not only move forward with the idea at Monday's meeting, but that it will also be able to agree on ways to end the cap quickly, if it turns out to be counterproductive.

In the meantime, the EU has recently agreed to implement a raft of energy-saving measures to reduce the chance of gas shortages, and has invested heavily in new sources of energy, and in new global suppliers of natural gas, which the continent uses extensively to generate electricity, heat homes, and power factories.