Image Source: DW
Gas prices have increased as a result of Russia continuing to reduce gas supply to Germany and other central European nations after earlier this week’s warning to do so.
Gas prices in Europe increased by roughly 2%, trading near the record high established after Russia invaded Ukraine. The Russian government is charged with utilizing gas as a political tool by critics.
The Nord Stream 1 pipeline from Russia to Germany has been operating at less than a fifth of its typical capacity as a result of flow reductions.
Before the Ukraine War, Germany imported more than half of its gas needs from Russia, the majority via Nord Stream 1 and the remainder via land-based pipelines. That had dropped to slightly over a quarter by the end of June.
The current reduction in power has been attempted to be justified by Russian energy company Gazprom by claiming that maintenance on a turbine was required. However, the German government claimed that there was no technical justification for doing so.
In order to inflict “fear” on people, Ukraine has accused Moscow of waging a “gas war” against Europe and shutting off supplies. Poland has stated that by the end of the year, it will be totally independent of Russian gas.
Since fewer than 5% of the gas in the UK comes from Russia, a disruption in the gas supply would not have a significant impact on the country. However, it would be impacted by growing global market prices as European demand rises.
The third-highest price on record for wholesale gas in Europe was €204.85 (£172.08) per megawatt hour. The price per megawatt hour reached its all-time high on March 8 when it ended at €210.50 (£176.76). The wholesale gas cost in Europe at this time last year, though, was just over €37 (£31.08) per megawatt hour.
Gas prices in the UK increased by 7% on Wednesday; as a result, they are now more than six times more than they were a year ago. However, it is still far lower than the high observed following Russia’s invasion of Ukraine.
Energy prices in the UK rose by an unprecedented £700 in April, and more price increases are predicted. One management consultancy warned that, contrary to prior predictions this month, the average annual energy bill might reach £3,850 by January.
According to BFY, their projection took into account the rise in wholesale prices over the previous two weeks as persistent tensions with Russia sparked worries about winter supplies.
The most recent decrease in flows puts pressure on EU nations to further lessen their reliance on Russian gas and is likely to make it more challenging for them to restock their gas supplies in time for the winter.
European leaders have discussed how to lessen their reliance on Russian fossil resources ever since the Russian invasion of Ukraine.
EU decided to reduce gas use
The European Union decided on Tuesday to reduce gas consumption in case Russia cuts off supplies, although some nations would be exempt to prevent rationing.
Members of the EU have now decided to voluntarily cut their gas consumption by 15% from August to March. However, after initially lacking exemptions, the agreement was softened.
The EU has warned that Russia is “constantly using energy supply as a weapon” and that its goal from the agreement is to save money and store energy before winter.
If supplies run out, the voluntary arrangement would become obligatory.
By the end of this year, the EU decided to ban all maritime imports of Russian oil, but it took longer to get an agreement on import restrictions.
The cost of wholesale gas has increased since Russia invaded Ukraine in February, which has affected consumer energy prices around the world.
Kremlin officials attribute the price increase to Western sanctions, claiming that they are a dependable energy partner and are not to blame for the recent disruption of deliveries.
