In the first place, according to him, the ceiling is set at around 2,000 dollars per thousand cubic meters (180 euros per MWh). This is a maximum, extreme level, typical of force majeure circumstances and almost double the current prices around $1,130.
Let’s remember that until mid-2021, the cost of gasoline did not exceed $400, which was considered quite normal for the market.
Second, the restriction is introduced not for current prices, but for exchange futures, promising, often speculative prices. And only if the cost of these futures exceeds the established limit for two weeks, and the difference between the prices of pipeline gas and LNG exceeds $616 per thousand cubic meters for 10 days.
“Therefore, the measure is aimed at an extreme case, to overcome unreasonable price spikes,” says the expert.
In addition, the gas price cap has nothing to do with sanctions against Russia, in contrast to the sensational “ceiling” on prices for offshore oil supplies.
“Firstly, a cap on gas prices is introduced for any supplier and trader, not only for Russian ones. Secondly, it is very high, far from current levels, and the usage mechanism does not limit supplies and prices by no means”, Mark Goykhman. explained.
The expert is sure that the innovation will not cause vendors to leave the European market for others, particularly Asian ones. Buyers there have shown this year that they are not ready to buy gasoline at inflated prices.
“Thus, the EU’s decision was made to protect its consumers, who suffered this year, from future inappropriate circumstances, but practically does not interfere with competition and normal market prices,” the expert concluded.