The European Commission has unveiled a proposal to cap wholesale gas prices – a first for the EU – to act as a safety net amid fears of sky-high costs for consumers.
The so-called "market correction mechanism" would be triggered as soon as monthly contracts exceed 275 euros per megawatt hour for two consecutive weeks.
Beyond this amount, transactions would no longer be authorised. Prices are currently hovering around 120 euros.
"This is not a regulatory intervention to set the price at the market at an artificially low level," European commissioner for energy Kadri Simson told journalists.
"It is a mechanism of last resort to prevent, and if necessary, address episodes of excessive high prices which are not in line with global price trends."
Introducing a cap on gas prices has been one of the more controversial measures for Europe amid an acute energy crisis following Russia’s invasion of Ukraine.
It comes on the back of pressure from member states including France who worry that energy prices will spiral out of control.
However some EU nations argue the price cap is so high it may never actually be triggered.
This year monthly contracts only exceeded €275 per megawatt hour for a brief period at the end of August.
European energy ministers are due to meet on Thursday to debate the commission's price cap proposal.
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