European gas prices have rocketed this year as Russia reduced fuel exports to retaliate for Western sanctions over its offensive against Ukraine.

Europe's energy crisis has increased the prospect of winter fuel rationing, corporate insolvencies and economic recession.
Europe's energy crisis has increased the prospect of winter fuel rationing, corporate insolvencies and economic recession. (AP)

The European Union's executive has outlined plans for raising more than $140 billion to cope with an energy crisis that has increased the prospect of winter fuel rationing, corporate insolvencies and economic recession.

"EU Member States have already invested billions of euros to assist vulnerable households. But we know this will not be enough," European Commission President Ursula von der Leyen told members of the European Parliament on Wednesday.

She unveiled plans to cap revenues from those electricity generators that have gained from surging power prices but do not rely on costly gas. 

She also outlined plans to force fossil fuel firms to share windfall profits from energy sales.

"In these times it is wrong to receive extraordinary record revenues and profits benefiting from war and on the back of our consumers," von der Leyen said.

She said the plan should raise more than $140 billion for the EU's 27 members to support households and businesses.

But her announcement did not include an earlier EU idea to cap Russian gas prices. That idea has divided member states, after Russia warned it could cut of all fuel supplies. Von der Leyen said the Commission was still discussing the idea.

Europe's benchmark gas price rose to about $208 per megawatt hour (MWh) on the comments, well below an August record above $343 but more than 200 percent up on a year ago.

A draft of the proposals did not include broader gas price caps.

READ MORE: Will the EU’s new measures ease the gas crisis?

Refilling Reserves

Europe has been racing to refill its storage facilities and has already met target to have them 80 percent full by November. 

But Russia's moves to cut supplies, including via the major Nord Stream 1 pipeline to Germany, makes the winter outlook uncertain. 

Moscow blames sanctions for hindering pipeline maintenance. European politicians say that is a pretext.

READ MORE: Gas wars: which EU countries will be most affected?

Source: Reuters