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Russia halts natural gas shipments to Poland and Bulgaria over refusal to pay in rubles

By April 27, 2022 No Comments

Poland’s prime minister has lashed out at Russia for trying to “blackmail” his country with an abrupt cut-off of gas supplies, and accused the nation of taking revenge for new sanctions imposed by Warsaw this week.

Hours after sanctions were announced targeting 50 Russian oligarchs and companies — including energy giant Gazprom — Poland said it had received notice that Gazprom was cutting off supplies to Poland for failing to comply with new demands to pay in Russian rubles. Gazprom is also expected to shut off gas to Bulgaria. 

Hungary and Austria said gas supplies were normal.

The move is Russia’s toughest retaliation so far against international sanctions over the war in Ukraine.

In response, the European Union will work to ensure the decision to cut gas supplies to Poland and Bulgaria has the least possible impact on consumers, European Commission President Ursula von der Leyen said on Wednesday.

“This is unjustified and unacceptable,” von der Leyen said. “Our response will be immediate, united and co-ordinated.”

WATCH | EU chief warns era of Russian fossil fuel in Europe is coming to an end:

Kremlin trying to ‘blackmail’ EU states over fossil fuels, says EU chief

2 hours ago

Duration 1:06

European Union member states have been preparing for Russia to cut gas supplies and are working to limit the impact on consumers, said Ursula von der Leyen, president of the European Commission, adding: ‘The era of Russian fossil fuel in Europe is coming to an end.’ 1:06

Polish Prime Minister Mateusz Morawiecki vowed that Poland would not be cowed by the gas cut-off. He said Poland was safe thanks to years of efforts aimed at securing gas from other countries.

Polish lawmakers stood and applauded when he said that Russia’s “gas blackmail” would have no effect on his country.

While Poland is far more dependent on coal, with gas only accounting for nine per cent of the country’s overall energy use, Russia supplied about 45 per cent of the country’s gas.

Russian supplies to Poland were already due to end later this year and Poland had already made new plans. A new pipeline, The Baltic Pipe Project, is due to become operational in the fall.

A political tool meant to shatter unity

Gazprom said it had halted gas supplies to Bulgaria as well, blaming a failure to pay in rubles. 

But Bulgarian Energy Minister Alexander Nikolov said on Wednesday that the gas was still flowing for the time being, and that his country would be able to meet the needs of users for at least one month. 

“Alternative supplies are available, and Bulgaria hopes that alternative routes and supplies will also be secured at the EU level,” Nikolov said, referring to an EU expert meeting due later Wednesday to plan the next steps.

“Obviously gas is used as a political tool. As long as I am minister, Bulgaria will not negotiate under pressure. Bulgaria is not for sale and does not succumb to any trade counterpart.”

Russia’s energy exports have largely continued since the war began, an exception to sanctions that have otherwise cut off Moscow from much of its trade with the West.

Russian gas company Gazprom’s headquarters is seen at the Lakhta Centre business tower in St. Petersburg, Russia, on Wednesday. Polish and Bulgarian leaders have accused Russia of cutting gas supplies to blackmail their countries. (Dmitri Lovetsky/The Associated Press)

Ukraine has accused Russia of blackmailing Europe over energy in an attempt to break its allies as fighting in Ukraine entered a third month. Buyers say Moscow’s demands for payment in rubles violates contracts, which call for payment in euros.

Andriy Yermak, chief of staff to Ukraine’s President Volodymyr Zelensky, said Russia was “trying to shatter the unity of our allies.”

Bulgaria, which is almost completely reliant on Russian gas imports, said the proposed new payment scheme was in breach of its arrangement with Gazprom. It has held talks to import liquefied natural gas through neighbouring Turkey and Greece.

Kremlin denies using blackmail

Russia responded to the accusations and denied it was using natural gas supplies as a tool of blackmail. 

Kremlin spokesman Dmitry Peskov told reporters: “Russia was and remains a reliable supplier of energy resources to its consumers and remains committed to its contractual obligations.”

He declined to say how many countries had agreed to switch to paying for gas in rubles after a decree was issued last month by President Vladimir Putin.

“When the payment deadlines approach, if some consumers decline to pay under the new system, then the president’s decree of course will be applied,” Peskov said.

Asked whether Russia was ready for the budget losses it could sustain if European countries declined to pay for gas in rubles, Peskov said: “Everything has been calculated, all risks have been forecast and necessary measures taken.”