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.
After Russia invaded Ukraine, European gas prices increased by roughly 2% and are already trading above their previous record high.
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 running at less than a fifth of its typical capacity as a result of flow reductions.
The majority of the gas that Germany buys from Russia—55 percent—comes through Nord Stream 1, with the remainder coming through land-based pipelines.
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 said that there was no technical justification for doing so.
In order to inflict “fear” on people, Ukraine has accused Moscow of launching a “gas war” against Europe and shutting off supplies.
Since fewer than 5% of the gas in the UK comes from Russia, an interruption 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.
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 during 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 consultant 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 supply.
The most recent decrease in flows puts pressure on EU nations to further lessen their reliance on Russian gas and is expected 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.
The European Union decided on Tuesday to reduce gas use in case Russia cuts off supply, although some nations would be excluded to prevent rationing.
Members of the EU have now decided to voluntarily cut their gas use 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 stockpile gas 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 gas import restrictions.
The cost of wholesale gas has already increased since Russia invaded Ukraine in February, which has had an effect on consumer energy prices throughout the world.
Kremlin officials attribute the price increase on Western sanctions, claiming that they are a dependable energy partner and are not to blame for the recent disruption of gas deliveries.