Europe grapples with surging power and gas prices

Households across Europe face a jump in energy bills this winter due to a global surge in wholesale power and gas prices.

Benchmark European gas prices have surged around 250 per cent this year due to low stock levels, high demand in Asia, high carbon prices and outages.

Governments across Europe are coming under pressure to curb energy bills to help families and small businesses as economies slowly emerge from the coronavirus pandemic.

Following are some of the measures the countries are considering:

Britain is considering offering state loans to energy companies that take on customers from firms which go bust due to soaring wholesale natural gas prices, business Secretary Kwasi Kwarteng said.

The unprecedented jump in wholesale prices will force more British energy suppliers out of business and the industry needs to prepare for prolonged pain, energy officials and the business minister said. The country’s energy regulator Ofgem has raised the cap on the most widely used tariffs by 12-13 per cent from October, after increasing it in April due to high wholesale costs.

The European Union executive said it will produce a “toolbox” of measures EU countries can take to tackle energy price spikes without breaching the bloc’s energy market rules.

The toolbox would help governments navigate options to respond quickly to price spikes within EU rules, including tweaking value-added tax (VAT) and excise duties or using direct support to shield consumers from high costs

A group of lawmakers has asked the European Commission to investigate the role of Russia’s Gazprom, saying the company’s behaviour has made them suspect market manipulation. In response, Gazprom says it supplies its customers with gas in full compliance with existing contracts.