Record gas prices in Europe alarm MEPs as Gazprom cuts EU exports

Surging gas prices across Europe have had such a knock-on effect on consumers and industry bills, that MEPs had to make their consternation clear to the European Commission.

At a heated debate in Strasbourg on Wednesday, EU lawmakers made their representations to energy commissioner Kadri Simson over the record increase in energy prices, driven by a surge in gas demand and tight supply.

“We need to identify if there was any kind of market manipulation in EU in recent months. We have to make sure that no state or non-state actor, be it Russian Federation, Gazprom, or anyone else manipulates or influences European energy prices,” MEP Mureşan Siegfried, a Romanian from the centre-right European People’s Party, said.

Spanish MEP Iraxte García Pereż, the leader of the S&D members, railed against energy exporters making millions over the crisis, saying Europe was being “blackmailed by certain countries”.

She said  “each state on its own is weaker” and that individually, governments are “at the mercy of price speculation, even competing among ourselves.”

Indeed Russian energy firm Gazprom cut its gas exports to the EU via Belarus by a massive 70%, and gas shortages loom due to the winter cold, energy prices could rise further. Gazprom has refused to guarantee additional volumes of supply, despite claims from MEPs that Gazprom does has sufficient production capacity. “Are we being played by Gazprom and Russia?,” Dutch Green MEP Bas Eickhout asked.

Malta’s 2016 deal with gas plant owners Electrogas, which includes Azerbaijan state-owned energy traders Socar Trading, included a five-year fixed-price LNG deal that will expire next year.

Maltese Labour MEP Josianne Cutajar (S&D)’s reaction to the rise in energy prices was met with a call for European solidarity in a market where energy exporters are based outside the EU.

But she also said that Europent’s transition to carbon neutrality would be costly and that this should not be borne by the worse-off. “Those in social accomodation, rural communities, and smaller islands, and our small businesses, to mention but a few, need to be with us in making out constinent carbon-neutral... although ambitious, the Fit For 55 package will not be enough if we don’t incorporate a social dimension, so we cannot accept that the most vulnerable pay the prices for a cleaner Europe.”

Labour MEP Cyrus Engerer called on the EC to make immediate proposals that could have a positive impact for all citizens and their pockets, and not see that the benefits are reaped by those providing and speculating on energy prices. “An Energy Union cannot leave anyone behind... we want to see that every country, even islands on the periphery of the European Union, also have a major share in this European Energy Union.”

42 MEPs, ranging from the Greens, through the EPP, S&D and Renew Europe, to ID on the right, suspect Gazprom is manipulating market prices and even sent a letter asking the European Commission to open an investigation.

“This price shock cannot be underestimated,” EU energy commissioner Kadri Simson told MEPs during the debate. “It is hurting our citizens, in particular the most vulnerable households, weakening competitiveness and adding to inflationary pressure. If left unchecked, it risks compromising Europe’s recovery as it takes hold.”

Currently, underground gas reserves are around 70% capacity, which Simson described as “tight”, but “adequate to cover the winter-season needs”.

Simson said governments can start providing targeted support to consumers, direct payments to those more at risk of energy poverty, or cutting energy taxes. “The priority should be to mitigate the social impact, ensuring that energy poverty is not aggravated,” she said.

The surge in energy will be on the EU agenda of the next summit on 21-22 October. Spain is suggesting to build a “strategic gas reserve” for the whole EU through a common procurement scheme that would enable internal redistribution among member states, if necessary.

France, Spain, the Czech Republic, Greece, and Romania also called for better coordination of natural gas purchases, arguing that the EU should reduce its “dependency on gas-exporting countries as fast as possible”.