EU Reportedly Unwilling to Impose Price Cap on Russian Gas as Norway ‘Skeptical’ About Measure

With EU members at odds over a price cap on Russian gas, President Vladimir Putin warns that if implemented, the move will prompt Russia to discard its energy contracts on supplying the blue fuel to Europe.

The European Commission is unlikely to slap a price cap on Russian gas imports, but it is considering imposing additional taxes on the "surplus" profits of energy companies, a leaked EU document has revealed.

The bloc’s proposed regulation on the "electricity emergency tool" seen by The Guardian does not mention the price cap, suggesting instead that Brussels should impose windfall taxes on the high profits of fossil fuel firms.

Additionally, the regulation, which is expected to be unveiled by European Commission President Ursula von der Leyen on Wednesday, calls for a separate cap on the revenues of low-carbon electricity producers.

The document was leaked as an unnamed source told Sputnik that a price cap on imports of Russian gas in the EU “will most likely not be included in the package of measurements” the bloc will announce on Wednesday, although the discussions in the European Commission on the matter are under way.

The remarks came after Norwegian Prime Minister Jonas Gahr Store made it clear on Monday that Oslo remains downbeat about setting a gas price cap on Russian gas.

“We approach [such] discussions in an open spirit, but we are skeptical of a maximum gas price,” Store said in a statement following his phone call with Ursula von der Leyen. He insisted that the price cap “does not change the fundamental issue that there is a gas shortage in Europe.”

This followed the EU’s energy ministers failing to reach a deal to introduce a price ceiling on gas imported from Russia, with several member states, including Italy, calling for a price cap on all gas bought by EU members, including liquefied natural gas (LNG).

The developments came after Russian President Vladimir Putin warned that Moscow could scrap its energy contracts in the event of price caps.

“We will not supply anything at all if it contradicts our interests. We will not deliver oil, gas, oil, coal, heating oil – we will not supply anything,” he said at the Eastern Economic Forum in Vladivostok earlier this month.

In a separate development, the Russian energy giant Gazprom said that the Nord Stream gas pipeline had been shut down for an indefinite period due to a malfunction of the only remaining working engine.

The pipeline, which is the main gas supply route to Europe, had been operating at 40% capacity or less since mid-June with a further drop to just 20% in July as Western sanctions impeded the return of the pipeline's turbines after repairs abroad.

The US and its allies slapped a spate of “severe” sanctions on Russia in response to Moscow launching its special military operation in Ukraine on February 24, 2022. The sanctions deteriorated the already complicated energy situation in Europe amid increasing inflation and fuel prices.