The Greek government on Wednesday has unveiled a six-point plan that aims at stabilizing Europe’s gas wholesale market in a letter sent to European Commission President Ursula von der Leyen, according to Greece’s Prime Minister Kyriakos Mitsotakis.

The proposed plan, outlined by Mr. Mitsotakis in an opinion piece on news outlet Politico, includes a price cap on title transfer facility, or TTF, prices, Europe’s regional gas benchmark, and daily price guardrails to limit volatility on the fluctuation band on TTF.

It also foresees a fixed-price setting as an emergency reaction to declarations regarding pipeline gas flows from Russia, as well as a profit cap on gross margins. In wholesale electricity markets, for example, this could be a 5% cap based on market regulators monitoring production costs and production assets.

The plan’s aim is to curb energy price hikes weighing on consumers’ bills as well as addressing the disruption of supplies caused by the war in Ukraine. “Natural gas has become a major factor in the power struggle between Russia and the European Union,” Mr. Mitsotakis said. “This spiral of speculation and politicized price hikes must stop. When markets cease to function normally, it is the obligation of governments and regulators to step in and ensure the market can reset and rebalance.”

The plan also comprises the consideration of a time-limited option to only allow trading with physical delivery to avoid market manipulation, and increasing the natural-gas market liquidity by market coupling between the EU, the U.S. and Asia.

On Tuesday, the European Commission said it plans to store more natural gas and add more renewable-energy sources as part of a plan to reduce the bloc’s dependence on Russian gas imports by two-thirds by the end of the year. According to the EU, the plan could end members’ dependency from Russian gas entirely before 2030.
Source: Dow Jones