The European Union warned that oil and gas prices will not decrease in the near future, even if the war in Iran ends, citing pressure on fuel supplies and tensions in global markets, and is preparing support measures for households and businesses.
Oil and gas prices in Europe, whose sharp rise has been caused by the ongoing war in Iran, will not return to normal levels in the near future, even if peace is declared tomorrow, warned the European Union's energy commissioner on Tuesday.
Dan Jørgensen stated that despite the absence of an immediate shortage of oil and gas in the 27 member countries of the bloc, there is pressure on the supply of diesel and aviation fuel, as well as "growing constraints" in global gas markets that are leading to rising electricity prices.
"I think it is extremely important to state as clearly as possible that even if peace comes tomorrow, we will not return to normal life in the foreseeable future," Jørgensen said at a press conference following a meeting of EU energy ministers.
According to him, the EU executive is preparing a series of measures to help families and businesses cope with the sharp rise in oil prices, which has led to a roughly 70% increase in gas prices and a 60% increase in oil prices in Europe. Jørgensen noted that since the beginning of the war, the EU's bills for imported fossil fuels have increased by 14 billion euros.
He added that closely coordinated actions by all EU member states are necessary to "avoid fragmented national responses and destructive signals for the markets."
The toolkit of the upcoming measures will be presented "very soon" and will include ways to help countries decouple gas prices from electricity prices. The possibility of reducing taxes on electricity is also being considered, as suggested by European Commission President Ursula von der Leyen.
Jørgensen stated that while he does not expect a repeat of the 2022 gas crisis, when companies made large profits due to the sharp rise in prices, a one-time "profit tax" for such companies "remains a possibility."
Currently, member states have "good opportunities" to provide financial support to vulnerable groups and sectors experiencing "extreme stress," and the Commission will make "these opportunities even simpler and broader," he said.
Jørgensen also urged EU countries to consider the International Energy Agency's 10-point plan, which includes working from home, reducing speed limits on highways, developing public transport, and increasing carpooling.
According to him, the EU remains committed to its ban on purchasing Russian gas aimed at reducing dependence on Russian supplies and stopping the financing of Russia's war in Ukraine. Dependence on Russian gas has decreased from 45% before the war to 10% currently, and it is expected to fall to zero as imports from alternative suppliers, particularly from the U.S., increase. The EU is also exploring new energy sources from Azerbaijan, Algeria, and Canada, as well as smaller producers worldwide.
The commissioner warned that the EU must not "repeat the mistakes of the past by allowing Putin to use energy as a weapon against us and to blackmail member states." He added that it would be "completely unacceptable" for the EU to continue purchasing energy resources that "indirectly help finance the terrible war that Putin is waging in Ukraine."
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