The EU has recognized that it is impossible to set a ceiling on gas prices, which at the same time will not affect long-term contracts or security of supply. Representatives of the European Commission told the 27 member countries, Reuters reported, citing two diplomatic sources.

After much bickering at an all-night summit, EU leaders agreed in October to instruct the European Commission to propose an "interim EU measure to limit gas prices for electricity generation" and a "temporary dynamic price corridor for natural gas transactions" to bring prices down.

But a compromise between those who want a cap (France, Spain and Belgium) and the German-led camp opposing it meant that additional conditions were added, namely that any cap must not affect long-term contracts, lead to increased gas consumption or provoke producers to divert supplies elsewhere.

Now the Commission has said that it is impossible to have a price ceiling that meets these criteria, one diplomat said, adding that envoys from the 27 EU member states in Brussels will discuss the issue next Friday.

A second diplomat said the Commission has instead proposed a voluntary market adjustment mechanism, which, however, does not go far enough to allow countries demanding a cap to instantly limit price hikes.

Both said some of the 15 countries demanding the cap have threatened to block other elements of the October energy deal, which also includes starting joint purchases and developing a new price benchmark, until the Commission presents a firm position on the price ceiling.