Algeria, Africa’s biggest gas exporter, challenged on Tuesday the European Union’s temporary mechanism to cap wholesale gas prices, AFP reported.

“Algeria does not support the idea of ​​capping prices,” said Minister of Energy and Mines Mohamed Arkab, quoted by the official APS agency.

“Energy markets must remain free for continued development and investment,” he added.

“Algeria is considered a reliable and safe supplier for Europe, and we fully agree with our European partners on long-term prices,” the minister continued.

EU member states approved a temporary mechanism to cap wholesale gas prices on Monday after a month of tough negotiations, a deal that will unlock further emergency measures to jointly buy gas and boost renewable energy.

The mechanism, approved by EU energy ministers, aims to block transactions in wholesale markets above a certain threshold, thus preventing any price increases that could be passed on to businesses and consumers.

Subject to strict conditions, the system will start operating on February 15 for one year. It will be automatically activated as soon as the monthly contract price (for next month’s delivery) reaches €180/MWh for three consecutive days.

Another condition for activation is that the price is at least 35 euros higher than international prices for liquefied natural gas (LNG).

Algeria is the largest exporter of natural gas in Africa and the seventh in the world.

Before the Russian invasion of Ukraine, Algeria, which has proven reserves of natural gas of almost 2.4 trillion cubic meters, supplied about 11% of the gas consumed in Europe.

Several European countries, which are trying to reduce their dependence on the supply of Russian products after the invasion of Ukraine, turned to Algeria, especially Italy.

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