European gas price cap ‘dangerous, harmful’

The planned European gas price cap would have a negative effect on gas markets, boost speculative activity, and it could undermine financial stability, ruling Fidesz MEP András Gyürk said on Wednesday.

Gyürk said in a statement that Fidesz had long maintained the position outlined in an impact study by the European Securities and Markets Authority (ESMA), namely that the gas price cap will prove to be a harmful and dangerous measure.

The cap was agreed on in December and is scheduled to come into force on Feb. 15.

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According to the study, the gas price cap could result traders quitting European markets en-bloc, he said. “Additionally, the number of transactions carried out outside the gas market could increase, further reducing the transparency of gas markets and making way for speculation,” he added.

The study showed that the gas price cap has no influence on the price dynamics of natural gas, and a drop in prices could mainly result from favourable weather, gas storage capacities filled to a high level, and people’s willingness to make sacrifices, he said.

“It has become clear that various ideas from Brussels have proven unsuited to reduce energy prices. It is high time for Brussels to draw the salient conclusions and not to introduce gas price caps,” he added.

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Source: MTI