Russia: Commentator calls for Putin to ‘turn gas off’
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Consumers already facing a rise in the energy cap in October could now be hit by even higher prices in the next few months.
Russian energy giant Gazprom yesterday cut off its gas supplies to Germany via the Nord Stream 1 pipeline for three-day maintenance work.
Britain gets less than five per cent of its gas from Russia but its prices are affected by global market fluctuations.
Experts have warned Russia’s invasion of Ukraine has been largely bankrolled by oil and gas revenues from the EU.
Dr Hafez Abdo, associate professor of accounting at Nottingham University Business School, said: “It is clear that Russia is using its gas as a strategic weapon against Europe.
“Cutting gas supply to Europe via the Nord Stream 1 pipeline is likely to increase the international gas prices further.
“Russia is possibly using this strategy to impact the international gas prices and therefore enhance its revenues from the gas exports.
“Such action may impact the UK domestic gas market in one or two ways: domestic gas prices would increase due to the international increases of gas prices, and there could be shortage of gas supply.
“This is because Norway, one of the UK’s main gas suppliers, may have to send more gas to Germany and other European states to compensate for some of the shortage of Russian gas.
“Therefore the UK may find itself receiving less of the Norwegian gas. If this happens, the UK energy security will deepen and the country may find itself forced to reopen the coal pits this winter.”
There are concerns Russia could extend the outage in an attempt to drive up gas prices, which have already rocketed in the past year.
Gazprom said its only remaining turbine, which is located at the Portovaya compressor station, north-west of St Petersburg, needs maintenance.
Klaus Mueller, the head of Germany’s Federal Network Agency, said the work is technically incomprehensible and he considers it a way of punishing Germany for siding with Ukraine since the Russian invasion.
Gazprom has repeatedly reduced the flow of gas through Nord Stream 1, claiming technical issues such as equipment repairs.
It has already slashed flows through the pipeline to roughly 20 per cent. Experts have claimed the latest three-day closure would have “limited impact” on the UK’s gas prices.
Dr Jorge Guira, associate professor of law at the University of Reading, said: “Prices rose sharply yesterday and have retreated on related futures contracts.
“As long as the Gazprom 1 shutdown is only for the planned three days, it is likely to have a limited impact on raising UK prices.
“Both German and French energy storage is ahead of schedule at 80 to 90 per cent capacity. The level of EU-wide gas demand increases as we head into winter and this is expected to lead to higher prices overall for the interconnected UK wholesale market.”
The energy price cap will rise by 80 per cent from October 1, taking average annual bills to £3,549.
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