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Dec. 19 (UPI) -- The energy minister of the European Union agreed Monday to a cap on natural gas prices after months of negotiations as pressure continued to mount with Russia's continuing war on Ukraine and winter setting in. Member states have struggled with the idea of price caps, which could help customers facing dramatically rising prices but raise worries about the implications for the market.
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"We have succeeded in finding an important agreement that will shield citizens from skyrocketing energy prices," said Jozef Sikela, Czech minister of industry and trade in a statement.
"We will set a realistic and effective mechanism, which includes the necessary safeguards that will steer us clear from risks to the security of supply and financial markets stability. Once again, we have proved that the EU is united and will not let anybody use energy as a weapon."
Energy ministers settled on what they're calling a market correction mechanism, which will be automatically activated under two conditions.
Those include if the front-month gas contracts exceed $191 per megawatt hour on the Dutch Title Transfer Facility for three working days in a row, and if the price is $37 higher than a reference price for liquid natural gas on global markets for the same period.
The Dutch TTF, which is Europe's main benchmark, traded around $116 per megawatt hour on Monday.
Dmitry Peskov, the Kremlin's longtime spokesman, criticized the move.
"This is the violation of the market process of pricing, the encroachment on market processes," Peskov said. "Any references to a 'ceiling' are unacceptable."
