European countries agree to a cap on the price of gas, which Moscow rejects

First modification: 19/12/2022 – 19:40

This limitation mechanism, adopted by the 27 countries after several weeks of discussions, will only be activated when the price level is at least 35 euros higher than the international average price of liquefied natural gas (LNG), according to the statement.

The European Energy Ministers, meeting in Brussels, “have reached an important agreement that will protect citizens from the escalation of energy prices, with a realistic and effective mechanism that includes the necessary guarantees for security of supply and stability financial markets,” said Czech minister Jozef Sikela, whose country holds the rotating EU presidency.

The mechanism will apply to futures contracts in the gas markets.

Directly affected by the move, Russia called the limitation “unacceptable.” “It is a violation of price fixing (…) Any reference to a ‘limit’ (on prices) is unacceptable,” said Kremlin spokesman Dmitri Peskov, quoted by Russian press agencies.

The gas contract for delivery within a month was trading this Monday on the TTF (the reference gas market) at around 110 euros/MWh.

The TTF is the de facto EU gas exchange and its price is used as a reference for most transactions on the continent.