BAKU, Azerbaijan, October 15. Prices will play an important role in terms of lowering the consumption of households and enterprises, Alfred Kammer, Director of the European Department of the International Monetary Fund (IMF), said during a press briefing October 14, Trend reports via IMF.
“With regard to price caps, there are probably two issues when we are talking about price caps. First and foremost, we are looking at individual packages and price caps which are kept in place for household consumption or for industry consumption. And clearly, in order to get a demand response and cut back on consumption, you can have targets, you can have voluntary campaigns, but prices will play an important role in terms of lowering the consumption of households and enterprises,” he said.
Kammer believes that in terms of some of the new packages which are being looked at right now, there is an element of becoming more targeted with these packages to be ensuring that prices are passed through to a sufficient extent in order to ensure that these demand reduction targets are being met.
“And I think that's a good development. Why is that important? Because it goes back to the word temporary, and that is also something we had in place during the pandemic. We thought the epidemic would initially be over after three months and it took a lot longer to go through that. And with the energy security situation, this is also not finished. After this winter, this will take another one and a half years at least in order to work itself through. So, in that sense, these demand compression parts are very important with regard to a more general price cap at the European level, that's something, and purchasing jointly gas this is something one would need to look closely when the details are available because there the devil is in the details on how they're being designed, whether effective and whether they actually meet the objectives,” he explained.