Germany warns on gas supply over Russia payment row

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Germany has declared an “early warning” over possible gas supply disruption amid a payments stand-off with Russia.

Russia had demanded “unfriendly” countries pay for its gas in roubles from 31 March, but the EU, which mainly pays in euros, has rejected the idea.

On Wednesday, Moscow clarified the move to rouble payments would be gradual.

But German economy minister Robert Habeck has urged consumers and companies to reduce consumption in anticipation of possible shortages.

Germany gets about half its gas and a third of its oil from Russia and has warned that it could face a recession if supplies suddenly stopped.

Under an existing gas emergency plan, the “early warning phase” is the first of three steps designed to prepare the country for a potential supply shock.

In its final stage, the government would bring in gas rationing.

Mr Habeck told a news conference that German gas supplies were safeguarded for the time being, but added: “Nevertheless, we must increase precautionary measures to be prepared for an escalation on the part of Russia.

“With the declaration of the early warning level, a crisis team has convened.”

The head of German network regulator Bundesnetzagentur, Klaus Mueller, said in a tweet that the aim of the early warning was to avoid a deterioration of supply. He urged consumers and industry to prepare for “all scenarios”.

The West has been imposing sanctions on Russia in response to its invasion of Ukraine.

In response, Russian President Vladimir Putin has demanded that natural gas exported to Europe should be paid for in roubles.

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Analysts say the move will support the country’s currency, which fell sharply after the invasion but has begun to recover.

Europe, which imports about 40% of its gas from Russia and pays mostly in euros, says Russia’s state-controlled gas giant Gazprom is not entitled to redraw contracts.

But Vyacheslav Volodin, the speaker of the lower house of the Russian parliament, said on Wednesday: “European politicians need to stop the talk, stop trying to find some justification about why they cannot pay in roubles.

“If you want gas, find roubles.”

The Kremlin also said Russia could start demanding payment in roubles for other commodities such as fertiliser, grain, metals and timber.

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