Taoiseach Micheál Martin has hailed last night's agreement by EU leaders on a price cap on imported gas, saying it would lead to a stabilisation of the market and reduce price spikes.

Mr Martin said that the impact for Irish consumers might not be immediately felt because Ireland received most of its gas via the United Kingdom.

"It’s good for Ireland. We export into the European market quite significantly. We see this as progress," he told reporters as he arrived for the second day of the summit of EU leaders in Brussels.

"We import our gas from the UK. Our prices are lower than some across Europe. There may not be an immediate impact other than to say that any stabilisation of the gas market ultimately benefits us."

EU leaders agreed to press ahead with a cap on the wholesale cost of gas as a way to bring down electricity prices during talks in Brussels, which concluded in the early hours of this morning.

The price cap will be conditional on safeguards to ensure it does not lead to a reduction in the supply of gas or a rise in gas consumption.

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After 11 hours of talks, EU leaders hammered out an agreement on a price cap which, according to European Council President Charles Michel, should soon start to lead to lower electricity prices.

Mr Martin said it was positive that Europe continued to work together collectively, and said that there had been a decline in gas prices since August.

He said the objective of last night's agreement was stability in the gas market to ensure that Europe was not subject to spikes in prices.

"[Gas] has been on a downward trajectory since the high point in August. Nonetheless it's still much higher than it was before the commencement of the [Ukraine] war," he said.

He said the benefits of the windfall tax on energy companies not relying on gas for production would not be felt in Ireland until "early next year."

EU leaders agreed to what is being called a dynamic price corridor when gas is being purchased from outside suppliers.

This would mean that wholesale prices could be capped if there are spikes in the benchmark price, but in a way which would mean it was still attractive for suppliers to sell gas into the European Union.

However, the cap would be heavily conditioned on ensuring it does not reduce the security of supply, and that it does not lead to a rise in gas consumption because of lower prices.

Leaders also agreed to press ahead with joint purchasing of gas over the longer term to help fill storage facilities, and to deepen measures to reduce gas consumption.

The price cap would take effect on the EU's main gas futures market in Amsterdam. Since Ireland secures its gas mainly via the London market it is not immediately clear what impact the measures will have.

Officials point out that if the price cap encourages suppliers to sell through the London market that could mean more supply and therefore lower prices.

The summit agreement set out a "solid roadmap to keep on working on the topic of energy prices", European Commission chief Ursula von der Leyen told a media conference.

The published text calls on the European Commission and EU countries in coming weeks to find ways to shield consumers from the high prices "while preserving Europe's global competitiveness... and the integrity of the Single Market".

Mr Michel said that "the energy crisis represents a threat to the internal market" of the EU and stressed "maximal coordination" was needed to protect it.

At least 15 EU countries, more than half the bloc, are pushing for an ambitious cap on prices and are increasingly unsettled by strikes and protests over the cost of living spreading across France, Belgium and other member states.

But the price cap idea has met resistance from Germany, the EU's biggest economy, fearing that gas supplies could end up shifting to more lucrative markets in Asia.

Several smaller economies are also furious that the German government will not back a gas cap and for going it alone in helping its citizens pay for high prices with a €200bn spending bonanza.

In the end, the agreed text said a "cost and benefit analysis" of a price cap for electricity generation should be carried out, and that the impact beyond Europe would be assessed.

French President Emmanuel Macron, who had gone into the summit saying Germany was isolating itself, expressed satisfaction with the result.

"The next two or three weeks will allow the commission to come up with these mechanisms" to be implemented.

He said it sent a "very clear signal to the markets of our determination and our unity".

German Chancellor Olaf Scholz said "good progress" had been made.

"We wanted, together, to limit fluctuations that could be caused by speculation."

There was no hiding, however, a general Franco-German discord that is simmering. That became more evident on Wednesday when the two countries delayed a regular meeting between cabinet ministers.

But France's Economy Minister Bruno Le Maire sought to downplay fears of a rift at the heart of Europe, telling the Frankfurter Allgemeine Zeitung newspaper that "no one can split up the Franco-German couple".

How he said there was a need for a "strategic redefinition" of bilateral relations to create "a new alliance".

In another sign the two were not in concert, France did not consult Germany before agreeing with Spain and Portugal to scrap a planned gas pipeline that Berlin has been pushing for years.

Leaders of the three countries met just before the summit and "decided to abandon the MidCat project and instead create, as a matter of priority, a Green Energy Corridor connecting Portugal, Spain and France with the EU's energy network."

The MidCat, a project that emerged a decade ago, called for an overland gas pipeline to be built to connect gas terminals in Spain and Portugal, across France, to European networks supplying Germany, among others.

In its place, they said, an underwater pipeline, called BarMar, would be laid from Barcelona in Spain to Marseille in France. It will initially be used for natural gas but, over time, more and more for more climate-friendly hydrogen.

But the agreement released by Macron and his Spanish and Portuguese counterparts laid out no timetable for BarMar's completion, and did not say how it would be funded, leaving experts sceptical.

In another nod to Germany's concerns, the summit agreement on energy backed joint purchases by the EU energy giants in order to command cheaper prices to replenish reserves, as long as "national needs" were taken into account.

It also set limits aimed at "preventing increased gas consumption".

Another point gives the EU's executive arm the power to establish a pricing "corridor" on Europe's main gas index to intervene when prices get out of control.

Additional reporting AFP