The euro fell to a five-year low against the dollar, falling below $1.06. Russia has acted on its longstanding threat to cut gas supplies to countries that don’t pay in roubles – starting with Poland and Bulgaria. Poland and Bulgaria say this amounts to breach of contract, as the contracts stipulate payments in euros, which causes natural gas prices to continue to climb on wholesale markets.
The British wholesale gas contract for immediate delivery has climbed nearly 14% to 146.50 pence per therm. The Dutch futures contract for winter delivery, the European benchmark, rose 20% earlier and is now about 8% ahead at €106 per megawatt hour. Prices are about six times higher than they were a year ago.
Ursula von der Leyen, the European Commission president, accused Russia of trying to use gas as “an instrument of blackmail”. She said Gazprom’s action was “unjustified and unacceptable” and that it showed Russia was an unreliable gas supplier. He says, “We are prepared for this scenario. We are in close contact with all member states. We have been working to ensure alternative deliveries and the best possible storage levels across the EU”.
Gazprom confirms that they have completely suspended gas supplies to Bulgargaz (Bulgaria) and PGNiG (Poland) due to non-payment in roubles.
