As electricity prices surge, Austrian chancellor proposes EU price cap

The proposal will be discussed at an emergency meeting of EU energy ministers

editor: REMIX NEWS
author: Magyar Nemzet
Power lines. (MTI/Tibor Oláh)

Austrian Chancellor Karl Nehammer proposed on Sunday that the European Union separate the price of electricity from the price of gas and introduce a price cap on electricity prices, Hungarian daily Magyar Nemzet reports.

“The prices of the electricity supply must be reduced, Putin must not be allowed to make decisions for the Europeans every day. We have to stop this madness that is currently raging on the energy markets, and this is only possible with a European-level solution,” the chancellor said in his announcement. “Something must be done, the market will not correct itself in its current form,” he added.

Austria’s gas supply is significantly dependent on the Russian market; however, the majority of its electricity is produced from renewable energy sources. The Reuters news agency noted that many in Austria are increasingly confused over the fact that the prices of electricity and gas are so closely related on the energy market.

The market price of electricity needs to come down and be decoupled from gas to bring the price closer to the actual cost of production, Nehammer said.

Petr Fiala, the prime minister of the Czech Republic, which currently holds the EU presidency, announced on Friday that an emergency meeting of the energy ministers of the member states will soon be convened. Nehammer confirmed that the plan to unbundle electricity rates will be on the agenda at that meeting.

Households in the United Kingdom recently saw the price cap on electricity in that country lifted by 80 percent, raising fears that millions may face energy poverty and be unable to pay to heat and light their homes this winter. Other countries like France have put a cap on how much households will pay for electricity; however, this has placed a significant burden on public finances. It may also distort energy markets, creating lower incentives for people to save electricity.

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