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The G7 decided on a ceiling on the price of Russian oil

The G7 decided on a ceiling on the price of Russian oil
The G7 decided on a ceiling on the price of Russian oil

Bra de fer also for Russian gas – Proposal for a ceiling from the EU – “We will completely stop the supply”, Moscow responds

Finance ministers from the G7, the Group of Seven of the world’s most powerful economies, plan to “urgently” implement a price cap on Russian oil and oil products, and are encouraging a “broad coalition” of countries to take part, they confirmed in a joint statement. their announcement that they issued today.

“The price ceiling will be set at a level based on a series of technical data and decided by the whole coalition before its implementation,” the seven countries wrote in the statement, assuring that future prices “will be announced publicly in a clear and transparent manner”.

“Our aim is to align the implementation with the timetable of the relevant measures within the sixth package of EU sanctions,” they add.

Yellen: The cap will help inflation and hurt Moscow

US Treasury Secretary Janet Yellen said today that a price cap on Russian oil agreed by G7 finance ministers would help fight inflation while also hurting Moscow’s ability to finance its war in Ukraine .

The cap helps achieve “our dual goals of putting pressure on global energy prices while depriving Putin of revenue to fund his brutal war in Ukraine,” Yellen said in a statement.

Japanese Finance Minister Shunichi Suzuki welcomed the Group of Seven finance ministers’ agreement to set a price ceiling on Russian oil exports and called for the swift implementation of the decision.

Suzuki told reporters that the cap would help moderate rising energy prices and inflation.

Medvedev: We will shut off gas in Europe

The former president of Russia Dmitry Medvedev stated that Russia will stop supplying gas to Europe if Brussels proceeds with imposing a cap on Russian gas.

Reacting to comments by the head of the European Commission, Ursula von der Leyen, about capping on the price Europe pays for natural gas, Medvedev wrote on the Telegram messaging app: “There will simply be no Russian gas in Europe.”

Von der Leyen: The time has come for a ceiling on Russian natural gas prices

As he pointed out, this move is necessary for the EU to deal with them attempts by Russian President Vladimir Putin to manipulate the European energy market.

The ceiling on the price of gas means that the EU will collectively decide on a maximum price, above which it will refuse to buy the Russian energy product.

In the meantime, on On September 9, the EU energy ministers will hold an extraordinary meeting., where in addition to the ceiling they will also discuss the decoupling of the price of electricity from that of gas, while on September 14, von der Leyen will announce the Commission’s proposals.

As it states moneyreviewthe The Commission is examining the two models of the South that are already successfully implemented, the Greek and the Iberian, plus a Greek proposal submitted in July to the Council of Energy Ministers by Kostas Skrekas, in order to formulate its proposals for a common European response to the energy crisis. For the first time during the long and deep energy crisis, the E.U. it appears open to consider all available options for price de-escalation, lifting the protection of the electricity market’s marginal pricing model that it has generously provided throughout the past, supporting the countries of the North against the demands of the South for structural changes.

The Greek model

According to a Commission document cited by Reuters, the E.U. as a measure of direct intervention, he is considering the Greek model, which provides for a ceiling per power generation technology at which producers are reimbursed, while the difference from the marginal price determined each time by expensive natural gas is collected by the state and directed through the Energy Transition Fund (TEM) in electricity bill subsidies, notes a Kathimerini report.

“An intervention would introduce a price cap for electricity generation technologies that have lower operating costs (incl. lignite, RES, etc.) than gas-fired power plants,” the document says. The aim of the intervention is to separate the commercial returns of the power generation in question from the current price of electricity, which has soared as a result of the spike in natural gas prices. Capping the price of certain technologies could generate financial resources for states, which would then be leveraged by governments by introducing measures to cap retail energy prices for consumers.

The memo, according to Reuters, “presents a first set of measures to optimize the operation of European electricity markets and reduce the impact of natural gas prices on the prices consumers pay.”

It is noted that the Greek Minister of Energy and Environment, Kostas Skrekas, has already sent letters to his 26 counterparts, in which he describes the Greek proposal for a mechanism to recover excess revenues from power generation companies, which has been implemented in Greece for two months with significant results. “For August, we have recovered almost 900 million euros from the power generation companies and have led them to the energy transition fund to subsidize the bills of the Greeks,” he said characteristically.

The Iberian model

At the center of the discussions is the Iberian model, which provides for the imposition of a ceiling on the price of natural gas used for electricity generation. The difference with the import price is covered by a special levy imposed on consumers. The cost of compensating the difference between the ceiling and the import price worries both the E.U. as well as many member states. Both models, however, can be implemented immediately and produce results within a month, which is why they are being eagerly considered by the Commission.

Russia also “cuts” oil in countries that will decide on a ceiling on the price

THE Russia will suspend supplies oil and oil products in the states, which will decide to limit the price of oil, the deputy prime minister told reporters on Thursday Alexander Novakthe TASS agency reported.

“If they impose price restrictions, we simply will not supply oil and oil products to such companies or states that impose restrictions, as we will not work uncompetitively”he said.

Novak also criticized proposals to cap the price of Russian oil as “absolutely absurd”, adding that the measure could completely destroy the global oil market.

“Interfering with the market mechanisms of such an important industry as the oil industry, which is the most important in terms of ensuring the energy security of the whole world, such efforts will only destabilize the oil industry, the oil market”, he said. noting that European and American consumers already paying high prices for energy now will pay for the measure initially.

“This will completely destroy the market”stressed the Russian deputy prime minister.

Source: RES-EMP

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The article is in Greek

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