EU Energy ministers meet in Brussels in a bid to off-set winter fuel crisis

European Union energy ministers are meeting in Brussels to adopt a package of measures including a windfall levy on profits by fossil fuel companies – but a deal on capping gas prices remains off the table.

With energy prices skyrocketing across Europe since the Russian invasion of Ukraine, EU member states have been negotiating proposals from the European Commission that the bloc's executive says will help raise $140 billion to help people and businesses hit by the energy crunch.

Several diplomats who spoke ahead of Friday's meeting expressed confidence a deal will be approved on a levy on surplus profits made in 2022 by companies producing or refining oil, gas and coal.

Under the deal, according to officials at France's energy ministry, these companies will be asked to give back a share of their profits above the average of the past four years.

The two other main elements of the plan are a temporary cap on the revenues of low-cost electricity generators such as wind, solar and nuclear companies, as well as an obligation for all 27 EU countries to reduce electricity consumption by at least 5% during peak price hours.

Reducing winter energy consumption

Estonian Economic Affairs and Infrastructure Minister Riina Sikkut said that “the most promising measure to actually bring down the average price is still the reduction of peak consumption.”

Sikkut underlined that any hardship this winter will be nothing compared with the price being paid by Ukrainians.

“We can't forget that we are in a situation of war. Ukrainians are paying with their lives, so we temporarily may pay higher bills or prices in the food store,” she said.

The measures, however, will not have an immediate effect on the gas prices that have been running wild as Russia reduced its supplies.

“This is just the first part of the puzzle and an immediate patch,” said Czech Industry and Trade Minister Jozef Sikela, who chaired the meeting in Brussels. “We must not stop here; we are in an energy war with Russia; the winter is coming. We need to act now ... Now means now. Now is not in a week and definitely not in a month.”

No consensus on price cap for gas

A group of 15 member countries has urged the European Commission – the EU's executive arm – to propose a cap on the price of wholesale gas as soon as possible to help households and businesses struggling to make ends meet.

“The price cap that has been requested since the beginning by an ever increasing number of member states is the one measure that will help every member state to mitigate the inflationary pressure, manage expectations and provide a framework in case of potential supply disruptions, and limit the extra profits in the sector," the group says.

The proposal will be discussed during Friday's meeting but has yet to gather unanimous support, with Germany notably blocking.

The European Commission has warned that such a cap could weaken the bloc's ability to secure gas supplies on the global market.

It is, however, open to the idea of introducing a price cap on Russian gas to mitigate the impact of the crisis while negotiating a lower gas price with other suppliers.

According to the European Commission, Russian gas supplies to the EU declined by 37 percent between January and August this year.