A draft document shows that European Union country leaders may support plans to launch a new gas price benchmark at a meeting next week in order to reduce energy prices for consumers and industries.

The leaders will meet on October 20-21, just days after the European Commission plans to propose measures to combat an energy crisis that is causing inflation and harming economies across the EU.

According to the media, a draft of their meeting conclusions stated that EU leaders would agree to “develop a new benchmark that more accurately reflects conditions on the gas market.”

Historically, the gas price at the Title Transfer Facility (TTF) hub in the Netherlands has served as a benchmark for liquefied natural gas deliveries into Europe. According to Brussels, a new index is required because the TTF is based on pipeline supply and no longer represents a market that includes more LNG.

Since invading Ukraine at the end of February, Russia has significantly reduced pipeline gas deliveries to Europe, prompting European countries to purchase more LNG cargoes.

The document indicated that it was unclear whether leaders would agree to a “temporary market intervention,” which could refer to a gas price cap.

For weeks, the EU’s 27 member states have been debating a possible cap.

Following a meeting of energy ministers on Wednesday, EU energy commissioner Kadri Simson stated that it was unclear whether there was enough support for a price cap on gas used for power generation to be included in upcoming EU proposals, which countries such as France and Romania have sought.

According to the document, EU leaders are expected to support other measures, which will be negotiated and may change before being approved at next week’s meeting.

They include EU countries coordinating the filling of their gas storage tanks ahead of next winter, as well as hastening negotiations with non-Russian gas suppliers to try to reduce prices.

According to the document, such negotiations could be conducted by countries buying gas together in order to leverage their “collective political and market weight.”

(Adapted from Reuters.com)

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