Gas price cap should not provide cheaper electricity to third countries – Lithuanian rep

VILNIUS – If the European Union decides on a gas prices cap, it's important to asses as to whether third countries will not benefit from cheaper electricity produced from gas, says Marius Vascega, head of the European Commission Representation in Lithuania.

"There are all sorts of additional nuances that we all need to work on. For example, whether we do not actually subsidize third countries by setting a cap because electricity markets are interconnected and electricity can flow freely to other countries as well. If we set a price cap, we will have to apply some form of subsidy, and someone has to pay for it," Vascega told the Lithuanian public radio LRT on Friday. 

It's also important to work out the share of electricity in EU member states is produced from gas, he underlined.

"The second thing, which is very important, is to find out how much electricity is generated from gas in each country. And here we have very different situations in different member states. So, we still have to answer these questions and find solutions to put it all together in a concrete way," Vascega said.

In his words, EU energy ministers are set to meet next week and will have to find solutions to ensure that a gas price cap does not affect the EU's long-term gas supply contracts.

"The other details that they will be talking about are about how to make sure that any price cap does not affect the EU's existing long-term gas supply contracts," Vascega said.

Early Friday morning, EU leaders agreed in principle to cap wholesale gas prices and to set a price cap on gas used for electricity generation, and called on energy ministers and the European Commission to come up with specific solutions, including a cost-benefit analysis. They also asked to prepare specific solutions for a "temporary dynamic gas pricing corridor".

Lithuanian President Gitanas Nauseda said it  was “a political signal” for the European Union’s energy ministers who would meet next week to “try to find solutions filling [our decisions] with very specific content”.