Russia will not immediately ask other countries to pay in rubles for gas imports, the Kremlin announced today, promising a gradual transition and noting that Moscow will work on the idea of expanding the list of its exported products for which it will ask to be paid in rubles.
Earlier today Duma President Vyacheslav Volodin warned the EU that if it wants Russian gas, it will have to pay in rubles, noting that the same will happen for exports of oil, grain, metals, fertilizers, coal and timber.
Alarm levels in Germany
Germany earlier today activated the first level of a contingency plan to manage gas supplies to Europe's top economy in preparation for disruption or termination of gas flows from Russia.
Russian exports account for 55% of Germany's gas imports for 2021. Although that figure fell to 40% in the first quarter of 2022, Economy Minister Robert Habeck said Germany would not achieve full independence from Russian supplies before mid-2024.
The problem that has arisen
Moscow announced last week the introduction of a mechanism until March 31 under which "non-Kremlin-friendly" countries that have imposed sanctions against Russia for its attack on Ukraine will pay in rubles for the purchase of Russian gas. The measure applies to Germany and other European countries, which so far pay in dollars.
Robert Habeck, the German minister in charge of the country's energy security, has rejected the Russian demand, saying the contracts will be implemented on the terms they stipulate.
Russia's biggest German customers are Uniper, RWE and EnBW's VNG, which have long-term contracts. They have not commented on questions about individual preparations to deal with the disruption of gas supplies.
Germany's three-level plan
Berlin's Gas Emergency Plan provides for three levels of alert.
The first level, activated today by the German government, applies when there are indications that there is likely to be an emergency in gas supplies.
The second level is an alert when supply disruption or exceptionally high demand affects the normal balance but can be corrected without intervention.
The third level is a declaration of a state of emergency and is triggered when market measures cannot cope with shortages. At this level, the network regulator, the Bundesnetzagentur, is called upon to decide how to distribute the country's existing oil reserves.
Which sectors are directly affected
If Germany does not secure an adequate supply of natural gas, the first to be affected will be industry, which accounts for a quarter of German demand.
"That means industrial production is lost, supply chains are lost," Leonard Birnbaum, CEO of energy group E.ON, told the ARD network. "What is certain is that we are talking about very big losses."
Households will take priority over industry, while hospitals, care centres and other public sector institutions with special needs will be the last to be affected by the gas shortage.
Source: protothema.gr
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