The European Commission has developed a draft regulation that proposes to set an upper limit on natural gas prices to avoid the record high prices seen in August. As reported by Bloomberg.
The commission proposes to set the upper limit at the level of 275 euros per megawatt-hour. That's well above current levels of around €120, but below the spikes Europe suffered over the summer.
The intervention tool will be activated if the futures on the Dutch gas exchange TTF (it is the benchmark for exchange gas prices throughout Europe) reach this level and the spread between the prices of TTF and liquefied natural gas exceeds 58 euros.
The commission is due to propose the final form of the so-called market correction mechanism later on Tuesday, and discussions are now ongoing.
The proposal still needs approval from national governments, but comes after months of lobbying by some member states to curb energy prices that have proved devastating to certain sectors of the European economy.