EU ministers split on bill relief after gas tops €100

EU energy ministers met in Luxembourg on Thursday to look for ways to cut household bills and protect supply before winter. The wars in Iran, Ukraine and Yemen have pushed oil and gas prices sharply higher, Reuters reported. The talks came one day after Europe's benchmark gas price briefly reached €100 per megawatt-hour. That was the first time since December 2022, when Europe was dealing with the loss of most of its Russian pipeline gas, according to Reuters.uk.finance.yahoo.com+1

The Dutch front-month TTF contract briefly traded at €100 at around 1335 GMT on Wednesday, according to data from the Intercontinental Exchange ↗ 2.33% cited by Reuters. Before the Iran war began in late February, the price was around €32. That is still far below the record of roughly €340 set in August 2022, Euronews reported.euronews.com+1

A "serious situation"

"We are in a very serious situation now. It does not look like we have a security of supply issue but I would warn against neglecting that," EU Energy Commissioner Dan Jørgensen told reporters on Wednesday. He said affordability was just as urgent. On Thursday, he said nearly 50 million Europeans cannot heat their homes properly and that the number could rise. He also warned governments not to over-subsidise fossil fuels. Jørgensen said the bloc now uses 18% less gas than in 2022 and gets its gas from more suppliers. But he said this crisis is in some ways worse because it also affects oil and oil products.live.euronext.com+1

EU gas storage sites are 75% full, compared with 83% a year ago. Even so, LNG purchases in the week to October 9 were 30% lower than a year earlier, said Rystad Energy analyst Mathieu Utting.rte.ie+1

Refineries and emergency stocks

On Wednesday, the Commission began talks with European refiners about raising output, possibly by easing some technical specifications. Jørgensen said the EU will draw up a joint roadmap with the refining industry. Its goals are to support domestic fuel production, bring fuel prices down, secure fuel for defence needs and fund biofuels and synthetic fuels. French energy minister Roland Lescure said Europe will release more than 42 million barrels from emergency stocks over the next three months, half of it diesel.mlex.com+1

Divisions over taxes

Ministers also discussed a Commission proposal to lower electricity bills by changing taxes and grid fees, for example by taxing electricity at a lower rate than gas. Sweden and Poland opposed the tax elements. Ireland, which holds the rotating Council presidency, expects the network-charges file to return in December. Irish minister Darragh O'Brien said he expected "some form of compromise" and added that governments "do not have a magic wand to make price increases disappear".en.politis.com.cy+1

Sweden's Ebba Busch raised a broader concern. "We're still just switching our dependency … from Russian gas to American gas instead," she said, calling that "a problematic switch, to say the least".live.euronext.com