The Price Cap Era And The Demise Of The Free Energy Market

Price caps are all the rage these days on the energy scene. The European Union is capping the price of gas and the G7 group is trying to cap the price of exported Russian oil. Both amount to direct market intervention of the sort normally associated with authoritarian regimes. Could price caps kill the free market? The idea of a free market is one where the price of a product or commodity is determined purely by its fundamentals: supply and demand. The reality is that there is no completely free market today. There are too many large market players—investment…