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EU splits over capping Russian gas prices amid ‘energy war’

European Union energy ministers were divided on Friday over whether to cap Russian gas prices as they met to devise measures to protect citizens and businesses from sky-high energy bills.

But ministers who arrived for the emergency meeting indicated broad support for measures to prevent energy suppliers from being overwhelmed by a liquidity crisis, and several said there was an urgent need to decouple the price of gas from other cheaper energy sources.

Friday’s ministerial talks are aimed at narrowing down options for further discussion rather than reaching a final decision on ways to tackle a crisis fueled by Russia’s invasion of Ukraine.

But many said agreement and action needed to be quick.

“We are in an energy war with Russia,” said Czech Industry Minister Jozef Sikela.

“We have to send a clear signal that we will do whatever it takes to support our families, our economies.”

Energy bills, which are already rising as demand for gas recovers from the Covid-19 pandemic, have soared since the war in Ukraine.

As Russia cut gas deliveries to Europe following the imposition of Western sanctions, EU governments are scrambling to limit the energy price shock.

An EU proposal to cap Russian gas prices has so far failed to gain support from most countries, with Russia threatening to completely cut off the dwindling supplies that continue to flow if such a step is taken.

The Baltic states are among those backing the idea, saying it would deprive Moscow of money to fund military actions in Ukraine.

But Central and Eastern European states, many more dependent than others on Russian fuel, fear losing all their supplies, while some question whether a ceiling would have much of an impact on lowering prices when deliveries are so low.

German Economy Minister Robert Habeck said EU ministers should give Brussels the green light to prepare legislation to decouple the price of gas from the price consumers pay for energy from other utilities.

The European Commission said this week that it would propose a measure to seize revenue from non-gas power generators and spend it on lowering consumer bills.

A draft of the Commission’s proposal, seen by Reuters, would have a cap of 200 euros ($201.74) per megawatt-hour on revenue received by generators that do not use gas as a source.

Applies to wind, nuclear and coal generators.

Source: CNN Brasil

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