Algeria, Africa’s largest gas exporter, says no to the European Union’s gas price cap. This is at least what the Algerian Minister of Energy and Mines, Mohamed Arkab, said on Tuesday 20 December on the occasion of the 4th Algerian-German Energy Day.
EU Member States approved on Monday a temporary mechanism to cap wholesale gas prices at €180/MWh. A price that is slightly higher than the current price of 115 euros. But at the height of the crisis last summer, gas reached 350 euros/MWh. This tool will come into force from 15 February 2023. It will be deactivated automatically if there is a supply risk or if gas consumption increases.
This is the decision to which Algeria objected, arguing that ‘it is a unilateral move that will have a negative impact on the market’. The Algerian minister further suggested that the EU measures could “destabilise the market” and that “the transparency of gas markets without restrictions or discrimination is more than just a necessity”.
“Energy markets must remain free to continue to develop and invest in the upstream,” he said.
Algeria is Africa’s leading exporter of natural gas and the world’s 7th largest supplier of the flammable liquid. For about a year, the country of President Abdelmadjid Tebboune has been supplying about 11% of the gas consumed in Europe, while Russia provides 47% of the population’s gas needs. Algeria’s proven natural gas reserves amount to almost 2 400 billion m3. Some countries, such as Italy, have sought to reduce their dependence on Russian supplies since the invasion of Ukraine and have turned to Algeria.
