European parliament caps soaring gas prices, as Morocco mitigates 'imported' inflation

As the Ukraine-Russia conflict persists, the European Union is actively working to reduce gas prices to alleviate the impacts of the energy crisis.

Europe now resorted to reducing the gas price ceiling to 188 euros per megawatt hour through the meeting of energy ministers in Brussels this week.

On Monday, European Union member states discussed capping gas prices nearly a third lower than the original proposal, as they try to break the deadlock to contain the impact of a historic crisis.

The Czech government, which holds the EU’s rotating presidency, proposed lowering the ceiling to 188 euros per megawatt-hour, compared to 275 euros proposed by the European Commission last month.

Last week, the leaders of the member countries urged their ministers to approve this approach, to put the final touches on a procedure that the countries had been discussing for months, and held two emergency meetings over.

Nearly a dozen countries, including Belgium, Poland and Greece, have demanded a capping of less than 200 euros/MWh to counter soaring gas prices, which have inflated energy bills for citizens and fueled higher inflation this year for most goods and services.

But Germany, the Netherlands and Austria are among the countries that fear the limiting of gas prices could disrupt Europe’s energy markets, and divert much-needed gas shipments away from the EU.

Spain greatly increased gas supplies to Morocco through the pipeline linking the Iberian Peninsula and the kingdom via Tarifa.

But Morocco’s “imported” inflation has been significant due to the rise of fuel prices. This is prompting the government to issue numerous rounds of aid to transportation professionals, among other resorts. 

For energy prices, a significant share of the government’s exceptional budgetary increase for 2022 was allocated to supporting the National Water and Electricity office, to mitigate the impact of rising prices on citizens. 

But the persisting inflation also pushed Morocco’s central bank to further increase its key interest rate, in an attempt to control supply and demand, and contain rising prices. 

Moroccans are still calling for more efficient measures, such as direct aid, a capping of fuel prices, the resolution of the Samir refinery standstill, and stronger monitoring of prices for all goods.