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EU plans to cap Russian gas price despite Putin threat


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EU plans to cap Russian gas price despite Putin threat
Russia president Vladimir Putin delivers a speech at the plenary session of the 2022 Eastern Economic Forum (EEF) on Wednesday in Vladivostok, Russia - TASS Host Photo Agency Handout via Reuters

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Brussels/Vladivostok – The European Union proposed a price cap on Russian gas on Wednesday after Russia president Vladimir Putin threatened to cut off all energy supplies if it took such a step, raising the risk of rationing in some of the world’s richest countries this winter.

The escalating stand-off could drive up European gas prices further, adding to already eye-watering bills EU governments are paying to stop their energy providers collapsing and prevent cash-strapped customers freezing in the cold months ahead.

Europe accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine.

Russia blamed those sanctions for causing the gas supply problems, which it puts down to pipeline faults.

As tensions rose, Putin said contracts could be ripped up in the event of price caps and warned the West it risked being frozen like a wolf’s tail in a famous Russian fairy tale.

The EU, however, plans to press ahead with a price cap on Russian gas and also a ceiling on the price paid for electricity from generators that do not run on gas.

EU energy ministers are due to hold an emergency meeting on Friday.

“We will propose a price cap on Russian gas… We must cut Russia’s revenues, which Putin uses to finance this atrocious war in Ukraine,” European Commission president Ursula von der Leyen told reporters.

The Netherlands, which has consistently opposed a gas price cap, may support one that targets Russian gas, a source with knowledge of the matter told Reuters on Wednesday.

A Czech minister said earlier, however, it must be taken off the agenda for Friday’s meeting.

The Czechs are helping to guide discussions as holders of the EU’s rotating presidency.

Putin anticipated the move and said Russia would hit back.

(Reuters)