Europe should refrain from capping the market price of natural gas even if costs are soaring due to the war in the Middle East, the prime minister of major supplier Norway said on Thursday.
The continent's benchmark front-month TTF gas contract has risen some 60 per cent following the outbreak of the US-Israeli war on Iran and Tehran's attacks on ships in the Strait of Hormuz.
The European Union is considering measures to curb energy prices, including by setting a cap on gas prices, controversial European Commission President Ursula von der Leyen said on Wednesday.
But while capping the price could be tempting, it would only lead to bigger problems by raising demand at a time of shrinking supply, Norway's Prime Minister Jonas Gahr Stoere said.
"It doesn't solve the challenge we are facing," Stoere told an energy conference in Oslo.
Norway, Europe's biggest supplier of natural gas, would remain a reliable provider of energy to the continent, he said.
Europe refrained from triggering gas price caps during a surge in prices following Russia's 2022 full-scale invasion of Ukraine, and Norway would continue to argue against such a cap, Stoere said.
Even before oil and gas prices rose, Brussels had been drafting proposals to provide relief to industries that say high energy prices mean they cannot compete with rivals in China and the United States.
(Reporting by Nora Buli; Editing by Terje Solsvik and Joe Bavier)
