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Italy minister: EU Commission's gas price cap plan "insufficient"

FILE PHOTO: First new cabinet meeting at Chigi Palace, in Rome

ROME (Reuters) - The European Commission's proposal to cap gas prices at 275 euros ($285) a megawatt hour (MWh) is insufficient and set too high, Italy's energy and environment minister Gilberto Pichetto Fratin said on Wednesday.

"It can certainly be a first signal, but a cap in this way and so high, we think it is insufficient. On the contrary, it risks fuelling speculation rather than being the tool to contain it," he told the SkyTG24 broadcaster.

EU energy ministers are due to discuss the proposal on Thursday, formulated after months of infighting within the bloc over ways to put a lid on spiking energy prices in the wake of Russia's invasion of Ukraine.

"Tomorrow we will see ... but as it is, (the proposal) is not to our liking," Pichetto Fratin said.

Under Brussels' proposal, the cap would kick in if the front-month price on the Dutch gas exchange Title Transfer Facility (TTF) exceeds 275 euros/MWh for two weeks and if, at the same time, the prices are 58 euros higher than a liquefied natural gas (LNG) global reference price for 10 consecutive trading days.

According to critics, the EU executive has set way too high a bar for the activation of the mechanism. At the moment, the front-month price on Dutch gas exchange TTF is around 125 euros.

($1 = 0.9651 euros)

(Reporting by Alvise Armellini; Editing by Keith Weir)