Germany takes step towards gas rationing over payment stand-off with Russia
Berlin activates emergency law as west refuses to comply with Moscow’s demand for roubles
The German government has taken the first formal step towards gas rationing as it braces itself for a potential halt in deliveries from Russia due to a dispute over payments.
Robert Habeck, economics minister, on Wednesday morning activated the “early warning phase” of an existing gas emergency law put in place to deal with acute energy shortages.
The move was triggered by German concern that Russia might cut supplies to the country and its neighbours because they are rebuffing Moscow’s efforts to force payment for gas imports in roubles.
Russian officials said on Tuesday that Moscow would not “supply gas for free” to Europe, a day after G7 countries unanimously rejected President Vladimir Putin’s directive requiring rouble payments.
During the early warning phase — the first of three stages in Germany’s emergency response — a crisis team from the economics ministry, the regulator and the private sector will monitor imports and storage.
If supplies fall short, and less draconian attempts to lower consumption do not work, the government would cut off certain parts of German industry from the grid and give preferential treatment to households.
Habeck, who is also vice-chancellor, told journalists in Berlin that the step was taken in anticipation of the Russian law, which conflicts with the denomination of long-term supply contracts in euros or dollars.
“We won’t accept a [unilateral] breach of contracts”, Habeck reiterated on Wednesday morning.
Habeck stressed that for now the gas supplies from Russia were flowing normally.
However, as Germany is trying to wean itself off Russian gas and now imports more LNG, Russia’s market share of German imports has fallen from an average of 55 per cent in recent years to 40 per cent in the past few weeks.
Last week, Germany unveiled targets to cut its dependence on Russian energy rapidly, vowing to all but wean itself off the country’s gas by mid-2024 and become “virtually independent” of its oil by the end of this year.
Europe’s wholesale gas price rose 8 per cent to €114.45 per megawatt hour in early trading on Wednesday.
Russia’s state-owned gas supplier Gazprom and the country’s central bank are due on Thursday to report to Putin on a mechanism to implement the change of payment currency for gas to roubles.
Some Russian politicians have intimated that the deadline to switch payment currency could come as early as the end of this month, although the Kremlin has not officially stated when the change will take effect.