HomeNewsItaly calls for EU gas price cap at €60 per MW/hr

Italy calls for EU gas price cap at €60 per MW/hr

1/3/2025

The European Union should extend its emergency cap on gas prices and set a ceiling of €60 per megawatt hour (MW/hr) to prevent a possible energy price shock, Italy's Energy Minister Gilberto Pichetto Fratin said on Friday.

Fears of an energy shock have risen after Ukraine refused to renew a gas transit agreement with Russia, marking the end of decades of Moscow's dominance over Europe's energy markets.

The EU's existing price cap expires at the end of this month and only applies if European gas prices exceed €180 per MW/hr, a level that has not been reached since the early days of the Russia-Ukraine conflict.

"I think the EU should at this point renew the price cap -- and we asked for it -- but not at €180, now it should be set at €50 or €60," the Italian minister said during a radio interview. "This would put a brake on purely financial transactions, which have nothing to do with the raw material but burden households and businesses."

The benchmark front-month gas contract at the Dutch TTF hub was up €0.4 at €50.17 per MW/hr, the highest level in over a year, according to LSEG data.

The halt in Russian gas flows and colder-than-average weather could drive the price towards €84, Goldman Sachs said in a report.

Italy's energy minister said the country had enough gas reserves to ensure there would be no disruption over the next two months. "I reassure everyone, we have no problems. The country's gas storage system is filled to almost 80% (of its capacity).”

Italy has gradually increased liquefied natural gas (LNG) import capacity since 2022 as part of plans to replace Russian supplies.

With a new floating terminal due to start commercial operations early April, Italy expects to be able to import up to 28 Bm3y of LNG, the same amount it got via pipeline from Russia in 2021.

Total gas demand for the country is estimated at around 61 Bm3 for last year, with Algeria and the Nordics among the main suppliers.

 

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