By Kate Abnett
BRUSSELS (Reuters) -Poland, Italy, Belgium and Greece have drafted a proposal for the European Union to introduce a "dynamic price corridor" for gas, in an attempt to pull down high energy prices and soaring inflation.
EU country leaders will discuss whether and how to cap gas prices at a meeting in Prague on Friday. Brussels is considering the idea but has yet to make a formal proposal - and in the meantime, some countries have drafted their own.
"The corridor would apply to all wholesale transactions, not limited to import from specific jurisdictions and not limited to specific use of natural gas," said a document outlining the proposed price "corridor" - a range determined by and lower than the market price.
The document, seen by Reuters and shared with other EU states, suggested setting the price corridor at a level that was high enough to still let the gas market function, and flexible enough to ensure European countries can still attract supply from price-competitive global gas markets.
If necessary, that could mean allowing gas transactions at prices above the corridor, it said.
"It should act as a circuit breaker and disincentive to speculation. It is not meant to suppress prices at an artificially low level," the document said, adding that it should also apply to long-term contracts that have a price pegged to existing gas price benchmarks.
European Commission President Ursula von der Leyen on Wednesday suggested various types of gas price caps for EU leaders to discuss, after France, Italy, Poland and 12 other countries last week urged Brussels to propose one.
In a letter to EU leaders on Wednesday, von der Leyen said the EU should consider a temporary price cap, while it works on launching of an alternative benchmark price to the Dutch Title Transfer Facility (TTF) gas price.
Other countries - among them Germany, Europe's biggest gas buyer, and the Netherlands - oppose the suggestion, warning capping prices could undermine energy security this winter.
(Reporting by Kate Abnettl; Editing by Emelia Sithole-Matarise)