Twelve European countries are now without any gas from Russia after Austria, Slovakia and the Czech Republic announced this morning that their supplies had halted altogether. Slovakia declared a state of energy emergency.

The three join Bosnia, Bulgaria, Croatia, Greece, Hungary, Macedonia, Romania, Serbia and Turkey as the effects of Moscow’s bitter row with Ukraine over gas payments inexorably spreads westwards.

France, Italy and Germany have already reported that their supplies from Russia are markedly down.

Gazprom, the Russian state gas monopoly, confirmed today that it had cut the amount of gas it was shipping to Europe through Ukrainian pipelines by a further 21 million cubic metres – the amount of gas, it said, that Kiev had stolen yesterday from the supplies intended for Europe.

In an exchange of recriminations, Alexander Medvedev, the deputy chief executive of Gazprom, said however that it was Ukraine, not Russia, which had shut off the flow of gas to Europe altogether. “Unfortunately the situation is continuing to deteriorate,” said Mr Medvedev. “Yesterday night Ukraine completely shut down all export pipelines to Europe via Ukraine.”

He warned that there was a growing risk that the empty gas pipes would be damaged by cold.

But the Ukrainian gas company blamed the Russians. “Russia stopped all transit through Ukraine” at 7:44 am (0544 GMT), said Naftogaz spokesman Valentin Zemlyansky. “Russia has left Europe without gas.”

Viktor Yushchenko, the President of Ukraine, wrote to his Russian counterpart Dmitri Medvedev demanding that Russia resume full gas supplies, pending a settlement of the payment row.

In Britain there were increasing concerns that families could be forced to pay more than expected for their gas and electricity. The “big six” energy suppliers — British Gas, ScottishPower, Scottish and Southern Energy, EDF Energy, npower and E.ON — had been widely expected to cut their retail gas and electricity prices over the next few weeks by about 10 per cent, reflecting a marked drop in the wholesale price of gas last autumn.

British wholesale prices leapt sharply yesterday, though, as Russia’s decision to withhold gas from Ukraine over unpaid bills and an unsigned contract for 2009 grew into dire shortages farther down the pipelines that take 36 hours to pump gas across the vast former Soviet country. Italy reported a 90 per cent cut in its Russian gas, France a reduction of 70 per cent and two importers in Germany said that they had serious shortfalls.

Most countries have stockpiled several weeks’ supplies after two mild winters and experience of a similar dispute between Moscow and Kiev in 2006. That row lasted three days but the latest disagreement, which started on New Year’s Day, seems to be far from over. There was one glimmer of hope when the head of Ukraine’s gas company agreed to go to Moscow for talks tomorrow with Gazprom, the Russian state-controlled monopoly gas supplier.

The EU broke from its diplomatic approach to demand a resolution to the crisis. “Without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the European Union, gas supplies to some EU member states have been substantially cut,” the EU said.

“This is completely unacceptable. The Czech EU presidency and the European Commission demand that gas supplies be immediately restored to the EU and that the two parties [Russia and Ukraine] resume at once negotiations with a view to a definitive settlement of their bilateral commercial dispute.”

Around Europe, both Russia and Ukraine are being blamed for the worsening situation. In Bulgaria, which relies almost completely on Russia for gas, the Prime Minister said that there was only one week’s supply left in reserves and appealed for industry to cut usage. The President even proposed that an ancient nuclear power plant, closed as a condition of Bulgaria joining the EU because it was deemed too dangerous, should be switched back on. Romania, which has supplies for over a month, nonetheless today declared a state of emergency.

Turkey was seeking gas from Iran, and Croatia introduced rations for industrial users to maintain domestic supplies. Austria said that it had three months’ reserves but called an emergency meeting at its Economy Ministry.

Gazprom has demanded a large price increase for 2009 and says that payment for November and December has not been fully received. It said that it supplied 65 million cubic metres (mcm) to Europe yesterday through Ukraine, a fall of 78 per cent from the 300 mcm that it had been supplying since the dispute started.

The Department for Energy and Climate Change at Whitehall called for Moscow and Kiev to urgently work to resolve the dispute. “We back the European Union’s call for gas supplies to be restored immediately and that both parties restart negotiations with a view to a speedy resolution of this commercial dispute,” a statement said. The department said that less than 2per cent of gas was imported from Russia and that it did not expect British supplies to be affected. Around 40 per cent of the gas used in Britain will be imported this year, up from 27 per cent in 2007.

That proportion is expected to rise to 75 per cent by 2015. Most of these imports come via pipelines from Norway and Holland. Britain is also able to import liquefied natural gas via ships to terminals at the Isle of Grain in Kent and Milford Haven in Wales.

Related posts...

• June 22, 2010 -- UK Business Energy Prices: (3)
  A new survey carried out by the Economist Intelligence Unit has revealed that over 80% of British firms expect energy and fuel prices to rise sharply and almost 50% have great concern that the UK coul...
• February 21, 2010 -- Identifying a Half Hour Meter: (0)
  How to find out if you have a half hourly meter – So how do you know if you have a half hour meter?  It’s actually quite straight forward, and all you will need to find this out is a recent copy o...
• February 10, 2010 -- UK Business Gas Prices: (0)
  Business Gas Prices can be difficult to understand, as there are many different types of pricing structures available.  You could simply ring around and obtain gas prices direct from suppliers, but it...
• February 7, 2010 -- Oil Prices Back To $70 Range: (0)
  Oil prices plunged in a busy trading session on Friday, triggering big losses across the commodities markets, as investors went back to buying into the US dollar.  Crude oil prices did have a partial ...
• February 5, 2010 -- CRC Business Lights: (1)
  The era of the 'on-all-night' illuminated high street could end, the Environment Agency is predicting. The agency says new rules will force businesses to switch off lights and displays at night to mee...
• February 3, 2010 -- Bglobal Smart Meter Deal: (3)
  Bglobal Plc said it has signed a new agreement to supply and install smart meters for British Gas Business during 2010. The contract value is anticipated at more than £12 million. In addition, the com...

RSS feed for comments on this post. TrackBack URI

Name (required)

Mail (will not be published) (required)

Website

CAPTCHA Code *