Energy crisis, what is the ceiling on the price of ‘dynamic’ gas

A new platform and a range around a variable reference value

The Italian proposal that attempts to break the deadlock in the EU to reach a decision on the ceiling on the price of gas is characterized by an adjective, ‘dynamic’. What does it mean? If the explanation in technical terms is necessarily complicated, the Minister of Ecological Transition Roberto Cingolani has explained it in more understandable terms.



In fact, it is a range that provides for a minimum and a maximum, around a value that can vary, within which the price of gas can fluctuate based on the dynamics of the market. Not a fixed bar but, in fact, a ‘dynamic’ threshold. It is the attempt to propose a solution that can be both useful and digestible from the front of countries, Germany, Austria and Holland first of all, which has always said that it is against the ceiling.

A new platform. A new methane trading platform would be built, surpassing the current one, the Ttf based in Amsterdam, which due to its small size is considered too sensitive to speculation. The idea is to refer to a new index calculated on the daily average of the prices of three key lists in the international commodity market: the American Henry Hub; the Jkm, parameter for the LNG on the Asian market; Brent, the London oil exchange.

How does the ‘dynamic’ roof work? It is based on a reference value calculated using external parameters, that of the three identified price lists, and which would allow fluctuations, for example of 5%, upwards or downwards, with respect to the central value. Value that would be fixed and regularly reviewed, on the basis of changes in the reference basket. The main purpose of a movable roof is to reduce speculation, discourage it, mitigate inflationary pressure (energy increases are the basis of the high inflation of recent months), manage market expectations and limit the excessive profits that are being made today. in the field.



Source-www.adnkronos.com