Friday, November 25, 2022

French Energy Minister Sees Economy at Risk Due to Rising Gas Prices

The Energy Minister of France, Agnes Pannier-Runacher, says the country may never regain some of its markets due to the skyrocketing gas prices and the unfavorable conditions they create for European production.

Speaking at an emergency meeting of EU energy ministers, summoned in an effort to decide on how to bring energy prices down, she criticized the European Commission’s proposal to cap the price of gas, saying that it would have little effect on skyrocketing prices, RT reported.

“This [price cap] may be helpful, but it is not a structural reform and is not a response to rising gas prices which the EU production is facing, and which is putting our economy at risk,” she said.

The official stressed that current gas prices, which are five-to-ten times higher than two years ago, degrade France’s industrial output, and called for a “structural solution” to shield the economy.

The proposed price limit would only rein in the costs in emergency cases while, in the long run, it may disrupt the market, Pannier-Runacher said, urging that measures be implemented to prevent the situation where France risks “losing part of its markets, with all the consequences it will have for producers and jobs in the industry.”

The initiative from the European Commission has drawn widespread criticism, with some countries arguing it lacks sufficient safeguards, while others, like Spanish energy minister Teresa Ribera even calling it a “mockery.”

The commission has proposed introducing a cap when prices on the TTF exchange, Europe’s gas benchmark, reach €275 per megawatt hour (where electricity is produced using gas) and when prices are €58 ($59.53) higher than the LNG reference price for ten consecutive trading days within the two weeks. Both conditions need to be met for the cap to be triggered.

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