Portugal Colonial - EU ministers fast-track 'unprecedented' energy plan

Moscow's invasion has seen the price of natural gas hit record levels, throwing the EU economy into deep uncertainty, with all eyes on whether Russian President Vladimir Putin will cut off the flow entirely.

European energy ministers tasked the European Commission in Brussels to work through the weekend to draw up legal texts that will include emergency funding for consumers sinking under the weight of soaring bills.

The EU will table "unprecedented measures next week for an unprecedented situation", energy commissioner Kadri Simson said, after meeting the ministers.

Simson said compensation for struggling households and businesses would be covered by a levy on non-gas electricity companies, such as nuclear, solar or renewable firms, that are seeing a revenue bonanza on the back of high prices for electric power.

The market price of electricity in Europe is closely linked to the gas price, meaning non-gas utilities are enjoying huge revenues despite far lower costs.

Simson said fossil fuel companies would also be levied on their mega profits from the inflated energy prices.

- Gas price cap -

Despite heated debate among European countries, the EU will also attempt to lower the price on natural gas, possibly through a price cap on Russian imports or through negotiations with other suppliers.

Czech Industry and Trade Minister Jozef Sikela, whose country holds the EU presidency, said there was a "prevailing view" among EU countries that some form of price ceiling was necessary.

But he called for patience "to fine tune where properly ... the cap should be implemented", adding that nothing was decided at this stage.

Fears are rife that targeting Russia alone would only further rile Moscow, which has threatened to cut off the supply to Europe entirely if a cap is imposed.

Last week Russia caused a major scare when it halted gas deliveries to Germany via a key pipeline for an indefinite period, a move the Kremlin blamed on Western sanctions.

One leading approach would be for EU countries to jointly negotiate with major suppliers such as Norway, Algeria or the United States in order to squeeze out better terms.

"Countries are calling for new thinking about capping the gas price ... and the question arises in different technical terms," said French energy transition minister Agnes Pannier-Runacher.

Despite the differences, she added, "what is interesting is that there is a common desire to move forward on this subject."

- Binding measures? -

One proposal that has broad backing is an idea to rescue electricity companies that are struggling to hedge their spending on energy markets that have been extremely volatile.

This would be done by relaxing EU rules on state rescues of companies that are suddenly facing more onerous terms for cash as fears of a crisis spread.

The commission will also design a mechanism to cut back on energy demand, with mandatory cuts imposed if voluntary limits at peak hours fail.

"Member states are us usually very reluctant to support binding measures, but this is exactly what Commission is considering," Simson said.

The commission, which draws up laws that are then ratified by member states and the European Parliament, will likely make its proposals as early as Tuesday.

"We will have a busy weekend and first days of next week before the final product...will be really ready," Simson said.

F.Moura--PC