FIA and a broad coalition of trade associations representing the entire energy value chain, including producers, suppliers, market operators, liquidity providers and financial institutions, have signed a letter to European Commission President Ursula von der Leyen and European Council President António Costa setting out shared concerns regarding considerations to introduce a natural gas price cap in response to current geopolitical tensions.
While fully supporting the EU’s objective of ensuring affordable energy for households and industry, the signatories caution that direct intervention in wholesale gas price formation could undermine Europe’s energy security, disrupt market functioning and pose risks to financial stability.
The letter explains that Europe’s ability to attract global gas and LNG supplies depends on credible, market-based price signals, particularly through trusted benchmarks such as the Title Transfer Facility. Artificially constraining prices could divert supply to other regions, weaken Europe’s reputation as a reliable market and increase the risk of shortages. It also highlights the vital role of energy derivatives markets in enabling effective hedging. A price cap could impair these markets, reduce liquidity, increase risk premiums and ultimately raise costs for consumers rather than lower them.
Read the letter in full.
