The European Commission has informed the governments of EU member states to reduce demand for gas and electricity to control prices and address the global energy crisis. This action is deemed necessary especially due to the decrease in gas reserves in Europe and severe price fluctuations in global markets.
Background and Reasons for Reducing Demand
In a letter sent by Dan Jørgensen, the EU Commissioner for Energy and Housing, to the ministers of member countries, he referred to the conditions of global supply constraints and emphasized that "reducing demand can be an effective tool for controlling prices." Jørgensen has asked ministers to take measures to reduce gas and electricity demand "for as long as necessary." This request comes at a time when gas reserves in Europe have currently reached 68% of their capacity, which is significantly lower than the 71% reserves at the same time last year.
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Consequences of Decreasing Gas Reserves in Europe
The decrease in gas reserves has impacted the energy market for various reasons, including global wars, sanctions against certain countries, and the closure of the Strait of Hormuz. The European Union has set a target for gas reserves to reach 90% by early November, but in March, some flexibility was shown in this target, allowing member countries to aim for an 80% target by 2026. This policy change has been made to prevent panic buying and reduce costs.
Jørgensen emphasized in his letter that the actions of EU countries to regulate prices should be "well-targeted" and "temporary" to prevent sudden spikes in demand. This situation could lead to an expensive winter for the European continent and impact the daily lives of people.
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