The maximum gas price of €180/(MWh) was introduced by the European Union on February 15, reports the press service of the Council of the EU.
The decision was announced on December 22 and took effect on February 15.
For the gas price cap mechanism to start, two conditions must be met simultaneously: the market price of monthly, quarterly and annual gas futures in the TTF hub must exceed €180/(MWh) for three consecutive days (about 2,000 dollars per thousand cubic meters) and, at the same time, be €35 higher than the global average cost of LNG.
The inclusion of the mechanism will imply the prohibition of buying gas at a price more than €35 higher than the price of LNG on the world market.
The activated mechanism will work for 20 days, but it will turn off only if the gas price drops to €180/(MWh) for at least three consecutive business days.
The mechanism can also be deactivated by decision of the European Commission, if it decides that the gas shortage threatens the energy security of the union.
Source: Rossa Primavera
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