Wednesday, March 30, 2022

Russia is threatening to cut off gas supplies, wants to be paid in rubles

 Germany has issued an "early warning" about possible natural gas shortages. The case is related to Russia's demand to pay for the raw material in rubles.

Speaking at a press conference in Berlin on Wednesday, Germany's vice-chancellor and minister of economy, Robert Habeck, said that the warning stage was of a preventive nature and would mean increased monitoring of gas supplies.

The minister's statement, which triggers the first of the three levels of risk of an energy crisis, does not yet provide for government restrictions on supplies. Habeck called on businesses and consumers to use gas economically. According to him, German gas storage facilities are currently 25 percent full.

- There is currently no supply shortage. However, we need to take further precautions to prepare for any escalation by Russia, - he said.

Concerns about the continuity of gas supplies to Germany arose after Russian President Vladimir Putin demanded that "hostile" countries start paying for gas in rubles, not dollars or euros, as agreed in contracts with Gazprom.

Germany, the largest consumer of Russian energy in Europe, rejected Putin's demand as "blackmail". "Payment in rubles is unacceptable," Habeck, quoted by CNN, said Monday.

Russia supplies Europe with 45 percent. in natural gas, 45 percent in coal, and 25 percent in crude oil. In 2019, before the COVID-19 pandemic cut commodity prices, oil and gas revenues accounted for 40% of the budget of the Russian Federation. In 2021, oil and gas accounted for almost half of the total exports of goods from Russia.