EU energy ministers discuss soaring fuel prices as winter looms

EU energy ministers are discussing on Thursday how to cut household energy bills and bolster security of supply ahead of the winter heating season as the wars in Iran, ‌Ukraine and Yemen send oil and natural gas prices soaring. EU energy commissioner Dan Jorgensen said nearly 50 million Europeans cannot adequately heat their homes and warned that number could rise as the bloc heads into what he called an even worse energy crisis than the one it faced four years ago. But he warned EU countries against over-subsidising fossil ‌fuels.

"We're better situated at dealing with this crisis than we were in 2022 because we've reduced our gas consumption. We use 18% less gas now than we ‌did in 2022. Also, we've diversified. We used to get 45% of our gas from Russia ... now we get gas from different suppliers around the planet," Jorgensen told reporters ahead of the ministerial meeting in Luxembourg. "But on the other hand, this crisis is also worse because this is also oil and oil products. We've even seen situations where there was a threat to our security of supply last summer on ⁠jet fuel. ​We're not there now."

The EU is entering ⁠the winter heating season with gas storage sites 75% full, down from 83% a year earlier. European wholesale gas prices briefly touched €100 per megawatt-hour on Wednesday for the first time since December 2022, when Europe ⁠was reeling from the loss of most Russian pipeline gas supply. Prices have climbed as the Middle East conflict has escalated and are now around three times higher than before the Iran war.

Fighting ​has damaged refineries across the Middle East and Russia, and disrupted oil and gas flows through key shipping routes including the Black Sea, Red Sea ⁠and Strait of Hormuz. The European Commission began talks with refiners on Wednesday on ways to boost output, including by potentially easing some technical specifications. Western powers also agreed this month to accelerate the release of more ⁠than ​400 million barrels from emergency oil stockpiles following US pressure.

France's energy minister Roland Lescure said on Thursday that Europe would release more than 42 million barrels over the next three months, half of which would be diesel. EU countries will also discuss a Commission proposal to cut electricity bills through tax and grid fee reforms, such ⁠as by taxing electricity at a lower rate than natural gas. However, energy ministers from Sweden and Poland voiced opposition to the taxation elements ahead of the meeting.

"We ⁠now have the second energy crisis in ⁠four years' time and I'm very worried that this far in after the full-scale invasion of Ukraine, we're still just switching our dependency ... from Russian gas to American gas instead and given the US involvement around the Strait of Hormuz ... that has ‌shown to be a problematic ‌switch, to say the least," Sweden's energy minister Ebba Busch told reporters.