Image Source: DW
Following Russia’s threat earlier this week to further reduce gas supply to Germany and other central European countries, gas prices have skyrocketed.
Nearing the record high reached after Russia invaded Ukraine, European gas prices increased by about 2%. Critics accuse the Russian government of exploiting gas as a political tool. The Nord Stream 1 pipeline from Russia to Germany has been experiencing reduced flow rates; as a result, it is currently running at less than a fifth of its maximum capacity.
Before the Ukraine War, Germany imported more than half of its gas needs from Russia; most of this gas was delivered through Nord Stream 1, with the remaining portion coming through land-based pipelines. That had decreased to slightly more than a quarter by the end of June.
The latest cut was attempted to be justified by Russian energy company Gazprom by claiming that it was required to accommodate maintenance on a turbine. However, according to the German government, there is no technical justification for it to set a supply cap.
Ukraine has charged Moscow with launching a “gas war” on Europe and shutting off supplies in an effort to terrorize its citizens. By the end of the year, according to Poland, it will be completely independent of Russian gas.
Because it imports less than 5% of its gas from Russia, the UK would not be negatively harmed by a disruption in the gas supply. However, when demand rises in Europe, it will be impacted by rising costs in international markets.
The final price for wholesale gas in Europe was €204.85 (£172.08) per megawatt hour, which is the third-highest price ever. On March 8, prices closed at €210.50 (£176.76) per megawatt hour, marking an all-time high. However, the wholesale gas price in Europe was somewhat higher at €37 (£31.08) per megawatt hour at this time last year.
The price of gas in the UK increased by 7% on Wednesday; it is now more than six times more than it was a year ago. It is still considerably below the peak that was observed following Russia’s invasion of Ukraine, though.
One management firm has warned that an average energy bill might reach £3,850 a year by January, significantly higher than predictions earlier this month. UK energy prices soared by an astonishing £700 in April, and more increases are predicted.
With the continued tensions with Russia causing worries about winter supply, BFY claimed that its projection reflected the rise in wholesale prices over the previous three weeks.
The most recent decrease in flows puts pressure on EU nations to lessen their reliance on Russian gas even further and is probably going to make it harder for them to restock their gas supplies in time for the winter.
Read Also: Russian Gas Supply to Europe May be Stopped Soon
Since Russia invaded Ukraine, European leaders have discussed ways to lessen their reliance on Russian fossil fuels.
EU made a commitment to cut gas supply and usage
In case Russia cuts off supply, the European Union decided to reduce gas use on Tuesday, but some nations would be exempt to prevent rationing.
The EU has now decided to voluntarily cut gas use by 15% from August to March. After initially lacking exemptions, the agreement was, however, softened.
In light of Russia’s “constant use of energy supply as a weapon,” the EU has stated that its goal from the agreement is to save money and store gas before winter. If supplies fall below critical levels, the voluntary arrangement will become obligatory.
By the end of this year, the EU agreed to block all maritime imports of Russian oil, but a deal on gas import restrictions has taken longer.
Gas prices have already increased dramatically since Russia invaded Ukraine in February, which has had a negative influence on consumer energy costs all around the world.
Asserting that it is a dependable energy partner and is not to blame for the recent disruption in gas supplies, the Kremlin attributes the price increase to Western sanctions.
Opinions expressed by California Gazette contributors are their own.
