As Europe considers interventions to bring down energy prices, the region’s largest gas supplier urged political leaders not to turn away from free markets forever.
(Bloomberg) — As Europe considers interventions to bring down energy prices, the region’s largest gas supplier urged political leaders not to turn away from free markets forever.
“Long term we believe the market is the right mechanism for making this whole system work,” Equinor ASA Chief Financial Officer Ulrica Fearn told reporters at a Pareto Securities conference in Oslo on Wednesday. “What needs to be done in the short term is a political decision.”
The European Union is zeroing in on a plan to help consumers amid a severe energy crisis. It is considering a cap on revenues from lower-cost power generators, a levy on fossil fuel companies’ excess profits, and a mandatory consumption cut.
Fearn acknowledged that action might be necessary in the current circumstances, but said political interventions shouldn’t permanently supplant the established market order.
“The market is the best long-term mechanism, because the market has been built up over years and it’s working from a supply and demand point of view,” Fearn said. Short-term actions “will have an impact on that market and it’s very, very hard to judge what the secondary consequences are.”
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