Russia has denounced European attempts to cap Russian energy prices, saying such measures are doomed to fail and prices will rise far beyond the attempted artificial ceiling.
Moscow’s top lawmaker and the speaker of Russia’s lower house of parliament, Vyacheslav Volodin, wrote on his Telegram channel on Friday that the global market is not limited to seven countries.
“What G7 state officials call a price ‘ceiling’ will become a price floor,” he said. “The marginal price announced by the West will become the lower bar.”
Volodin said that the countries involved in the program had failed to find an alternative for Russian energy and had concluded that they would no longer be able to purchase fuel from Russia “on the cheap.”
The top lawmaker’s remarks came in the wake of a plan by Group of Seven (G7) countries to impose a price cap on Russian oil exports last week, a move that could restrict Russia’s ability to secure tankers and insurance from countries beyond the G7.
Meanwhile, the EU ministers who had gathered on Friday to discuss imposing a price cap on Russian fuel were split on the issue.
Western governments, especially the European countries, have been experiencing a worsening energy crisis after sanctioning Russia for its military operation in Ukraine.
“We are in an energy war with Russia,” Czech Industry Minister Jozef Sikela said, adding that “we have to send a clear signal that we would do whatever it takes to support our households, our economies.”
Soaring costs of gas and electricity have been the main challenge for the European leaders, prompting them to try every possible way to limit the resulting energy price shock.
An EU proposal to cap Russian gas prices has so far failed to win support from a majority of countries, with Russian President Vladimir Putin threatening to completely cut off energy supplies and warning the West it would be “frozen” like a wolf’s tail in a famous Russian fairy tale.
Central and eastern European states, which are more reliant on Russian fuel than others, fear losing all their supplies.
“If price restrictions were to be imposed exclusively on Russian gas, that would evidently lead to an immediate cut-off in Russian gas supplies. It does not take a Nobel Prize to recognize that,” Hungarian Foreign Minister Peter Szijjarto said.
German Economy Minister Robert Habeck suggested that the EU should prepare legislation to decouple the gas price from the price consumers pay for power from other energy carriers.
Accordingly, the European Commission is set to propose a measure this week to claw back revenues from non-gas power generators (such as wind, nuclear and coal generators) and spend the cash on cutting consumer bills.
The commission is set to take the step in a bid to skim off excess profits made by non-gas producers that have lower running costs but have still been able to sell their power at soaring prices.
“The measures the Commission has recommended in taking some of those excess profits and recycling them back into the households makes sense,” Irish Environment Minister Eamon Ryan said.
The EU is bracing for a recession in the wake of skyrocketing gas prices and soaring inflation, as the coming winter is likely to be “one of the worst in history,” according to the EU’s economics commissioner, Paolo Gentiloni.
The European Union has pledged to end its dependence on Russian energy sources, a decision that seems to be backfiring ahead of the cold winter.