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EU plans cap on Russian gas in retaliation for Ukraine war

The European Union seems ready for a new confrontation with Russia over gas supplies.

The bloc announced plans to impose a price limit on Russian gas imports as a retaliation against the war in Ukraine. It also proposed measures to assist member states in dealing with the energy shortage.

Ursula von der Leyen was the president of European Commission. This came just hours after Russia’s leader threatened that he would shut off water to any Western countries who try to impose energy price caps.

After Gazprom’s decision last week to shut down the Nord Stream 1 pipeline’s main taps indefinitely, state-run Gazprom stated that Russia had become an “unreliable source” and that EU’s reliance upon Russian gas had decreased significantly since the invasion. Stocks were at 82%.


However, one of the measures betrayed the dangers the bloc faces ahead of winter.

Ms Von der Leyen suggested a mandatory reduction in electricity usage across the EU to preserve power. This was based on a 5-year average and a further 5% at peak prices.

She also proposed a cap on non-gas-fuelled generators’ revenue – supported by record raw energy prices – to redirect their “unexpected profits into measures that support households or companies.

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Image Ursula von der Leyen stated that consumers in the EU are facing ‘astronomic bills

She said that a windfall tax on fossil fuel companies was also in the works, as well as aid for utility providers who are struggling to cope with the burden of wholesale prices.

There may be opposition to the plans, which must be approved by all member states.

Some EU countries are cautious about capping Russian gas prices to avoid losing the diminishing supply from Moscow.

This follows confirmation that the UK plans to lower its energy bills using a taxpayer funded bailout. Details are expected to be released this week.

Ms Von der Leyen stated that the planned cap of wholesale prices from Russia is now possible because the bloc has reduced its dependence on Russian energy.

She stated that Russia’s grip over our energy supply has been weakened by increasing its preparedness. Demand reduction, she added, “has allowed us to increase our common storages to 82%.”

“Through diversification, we have increased LNG or pipeline gas deliveries from the US, Norway and Algeria. Norway, for example, is now delivering more gas into the EU than Russia.

As part of EU storage bolstering efforts, the UK has been pumping record volumes to Europe via interconnectors over months.

Ms Von der Leyen stated that Russian gas was responsible for 9% of all imports, compared to 40% in February prior to the invasion of Ukraine.


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