EU package that will reduce electricity prices clearly

The announcement from the extraordinary council meeting due to the energy crisis in Europe came from the Czech presidency just before lunch.

The measures which, with this decision, are now on their way have been developed in a short time and should contribute to pushing down electricity prices this winter.

Each country must reduce electricity use by five percent during the most critical hours and so there will be different types of taxation on excess profits among energy producers, both for fossil-free and those that use gas, oil and coal.

"Great effect"

- If this is coordinated at the European level, it could have a very large effect on our electricity prices, said Energy Minister Khashayar Farmanbar (S) to TT before the meeting.

The pace is unusually high in the EU right now when it comes to developing various proposals, but many want to see more.

For example, a majority of EU governments this week signed a sharply worded letter calling for a price cap on imported natural gas.

It is mainly about southern and eastern European governments, all pressured by dissatisfied voters at home as they have a large share of unusually expensive gas as a source of electricity and heating.

Doubtful about price ceiling

A price ceiling in the EU on imported gas must be combined with measures to simultaneously slow down gas consumption, according to Farmanbar.

- If you artificially lower the price of gas by setting a price ceiling, it must also be combined with a reduction in consumption.

At the same time, you have to start portioning out the gas or introduce some kind of rationing system for the gas, he says.

- Then there will also be a discussion about how it should be financed in that case - if a country like Sweden, which hardly uses any gas, has to be involved in financing such a measure, it is of course not as interesting from our perspective.

An argument against a price cap is that it may make it more difficult to find alternative gas suppliers in Norway, the USA or North Africa when the Russian gas supplies to the EU may soon disappear completely.

Another is that lower prices risk increasing demand in a situation where there is already a gas shortage.

The EU Commission is expected to come back with more concrete decision-making material at the beginning of October.

Negotiate the gas

The EU's energy commissioner Kadri Simson wants to negotiate with gas suppliers that can be trusted before going ahead with a price ceiling with them.

But Russia is not included among them.

- I am convinced that we need a price ceiling on gas imported from Russia, at a level that still makes it attractive for them to export to Europe, she said at a so-called briefing before Friday's meeting.