Gas prices soar as Russia cuts German supply

Gas prices have soared after Russia further cut gas supplies to Germany and other central European countries after threatening to earlier this week.

European gas prices were up almost 2 per cent trading above an earlier all-time high after Russia invaded Ukraine.

Critics accused the Russian government of using gas as a political weapon.

Russia has been cutting flows through the Nord Stream 1 pipeline to Germany, with it now operating at less than a fifth of its normal capacity.

Before the Ukraine War, Germany imported over half of its gas from Russia and most of it came through Nord Stream 1 – with the rest coming from land-based pipelines.

By the end of June, that had reduced to just over a quarter.

Russian energy firm, Gazprom, has sought to justify the latest cut by saying it was needed to allow maintenance work on a turbine.

The German government, however, said there was no technical reason for it to limit the supply.

Ukraine has accused Moscow of waging a “gas war” against Europe and cutting supplies to inflict “terror” on people.

Meanwhile, Poland has said it will be fully independent from Russian gas by the end of the year.

Prime Minister Mateusz Morawiecki said: “Even now, Russia is no longer able to blackmail us in the way it blackmails Germany for example.”

The UK would not be directly impacted by gas supply disruptionas it imported less than 5 per cent of its gas from Russia. However, it would be affected by prices rising in the global markets as demand in Europe increases.

UK gas prices rose to 7 per cent on Wednesday, so the price was now more than six times higher than a year ago. However, it was still well below the peak seen in the aftermath of Russia’s invasion of Ukraine.

UK energy bills increased by an unprecedented £700 in April, and were expected to rise again with one management consultancy warning a typical energy bill could hit £3,850 a year by January, much higher than forecasts earlier this month.

BFY said its forecast reflected the increase in wholesale prices over the past few weeks with the ongoing tensions with Russia sparking concerns over winter supplies. -BBC

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