Russia’s Gazprom has suspended gas deliveries to Poland and Bulgaria, citing the two countries’ refusal to pay in Russian roubles, a demand made by President Vladimir Putin after the West sanctioned Moscow over its war in Ukraine.
In a statement on Wednesday, the Russian energy giant said it has “completely suspended gas supplies” to Poland’s PGNiG and Bulgaria’s Bulgargaz “due to absence of payments in roubles”.
The cut offs are the first since Putin’s announcement last month that “unfriendly foreign buyers” would have to transact with Gazprom in roubles instead of United States dollars and euros. Only Hungary has agreed to do so, with other countries rejecting the demand as an unacceptable one-sided breach of contracts and a violation of sanctions.
If deliveries were halted to other countries as well, it could cause economic pain in Europe, driving natural gas prices up and possibly leading to rationing. But it would also deal a major blow to Russia’s own economy.
Gazprom said Poland and Bulgaria had both been warned of Wednesday’s suspension in advance.
“Payments for gas supplied from April 1 must be made in roubles using the new payments details, about which the counterparties were informed in a timely manner,” it said.
The countries, however, accused Gazprom of breach of contract, and the Polish gas company threatened to take legal action.
“Cutting gas supplies is a breach of contract and PGNiG reserves the right to seek compensation and will use all available contractual and legal means to do so,” it said in a statement.
Polish Prime Minister Mateusz Morawiecki meanwhile said his country is prepared to make do, noting that its gas storage facilities were 76 percent full.
In Bulgaria, which relies on Russia for most of its gas imports, Energy Minister Alexander Nikolov told reporters that his country has already paid for Russian gas deliveries for April and insisted that Sofia would not pay in roubles as demanded by Putin.
“Because all trade and legal obligations are being observed, it is clear that at the moment the natural gas is being used more as a political and economic weapon in the current war,” the minister said.
Before the invasion of Ukraine on February 24, Europe received about 40 percent of its gas from Russia, mainly for residential heating, electrical generation and the fuel industry, with Germany particularly dependent on it. The imports have continued despite the war.
Approximately 60 percent of imports are paid in euros, and the rest in dollars. Putin’s demand was apparently intended to help bolster the Russian currency against Western sanctions.
Wednesday’s cutoffs will affect deliveries of Russian gas to Poland through the Yamal-Europe pipeline, according to PGNiG, and to Bulgaria via the TurkStream pipeline, that country’s energy ministry said.
The Yamal-Europe pipeline carries gas from Russia to Poland and Germany, via Belarus. Poland has been receiving some 9 billion cubic metres annually, fulfilling some 45 percent of the country’s needs.
In its Wednesday statement, Gazprom also warned Poland and Bulgaria that if they siphon gas intended for other European customers, the deliveries to Europe will be reduced to that amount.
Gazprom’s moves prompted swift condemnation, with Ukraine describing it as “blackmail” and the United Kingdom saying it added to Russia’s “pariah status”.
Andriy Yermak, an aide to Ukraine’s President Volodymyr Zelenskyy, said Russia was “beginning the gas blackmail of Europe” and accusing Moscow of trying to “shatter the unity of our allies”.
In London, British Deputy Prime Minister Dominic Raab said Russia’s moves will only add to its status as an economic and political pariah.
“It (halting gas supply) will have a … very damaging effect on Russia as well because it is becoming further and further, more and more, not just a political pariah, but an economic pariah,” Raab told Sky News.
In Washington, DC, prior to the Gazprom announcement, White House Press Secretary Jen Psaki said the United States had been preparing for such a cutoff by Russia.
“Some of that has been asking some countries in Asia who have excess supply to provide that to Europe,” Psaki said. “We’ve done that in some cases, and it’s been an ongoing effort.”
Source; Al Jazeera
BDST: 1425 HRS, APR 27, 2022
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