Germany has issued an “early warning” of possible natural gas shortages after Russia said it wanted to be paid in rubles, rather than dollars or euros, and threatened to cut off supplies if that didn’t happen
The German government said Wednesday that the country had enough gas for now, but it urged all consumers from companies to hospitals and households to reduce their use as far as possible with immediate effect.
“There are currently no supply shortages,” Economy Minister Robert Habeck said in a statement. “Nevertheless, we must take further precautionary measures to be prepared for any escalation by Russia.” German gas storage is currently filled to 25% capacity, he added.
The “early warning” is the first of three alert levels set out in Germany’s plan to manage gas supplies in a crisis. If the situation deteriorates, the government would declare an “alarm,” followed by an “emergency.” At that highest state of alert, regulators can ration gas to maintain supplies to “protected customers” such as households and hospitals. Industrial users would be the first to face cuts.
“This means that industrial production gets lost, that supply chains get lost,” Leonhard Birnbaum, chief executive of German energy group E.ON (EONGY), told public broadcaster ARD, according to Reuters. “We are certainly talking about very heavy damages.”
The European Union depends on Russia for about 40% of its natural gas, and Germany is Moscow’s biggest energy customer on the continent. EU sanctions imposed on Russia over its invasion of Ukraine include a ban on new investment in energy projects but do not target oil and gas exports.
With the sanctioned Russian central bank banned from swapping euros and dollars for rubles, Moscow is trying to find a new stream of cash it can spend easily.