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Sunday, May 19, 2024

Russia stops natural gas supplies to Poland and Bulgaria

Russia has cut off natural gas supplies to Poland and Bulgaria, dramatically escalating its response to Western sanctions imposed on Moscow over the war in Ukraine. Russian state energy giant Gazprom said in a statement Wednesday that it had fully halted supplies to Polish gas company PGNiG and Bulgaria's Bulgargaz after they refused to meet a demand by Moscow to pay in rubles, rather than euros or dollars.

Russian energy giant Gazprom on Wednesday halted gas supplies to Bulgaria and Poland over a failure to pay for gas in rubles. It marks Russia’s stiffest reaction yet to sanctions imposed by the West over the conflict in Ukraine.

Gazprom said that it hadn’t received payments in rubles since April 1 from Poland and Bulgaria and was suspending deliveries as of Wednesday.

“Gazprom has completely suspended gas supplies to Bulgargaz [Bulgaria] and PGNiG [Poland] due to the absence of payments in rubles,” Gazprom said in a statement. “Payments for gas supplied from April 1 must be made in rubles using the details of the new payment, about which the counterparties were informed in a timely manner.”

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Russia’s revenge

German President Frank-Walter Steinmeier reacted to the announcement by saying it was a “blackmail attempt” by Russia.

“This is a breach of the rules on the part of Russia – this is a blackmail attempt,” Steinmeier said.

“We cannot simply accept it, we have to defend ourselves against it,” he added.

Breach of contract

But both Poland and Bulgaria responded immediately to the development, saying Gazprom was in breach of contract.

Bulgaria insisted it has paid for Russian gas deliveries for April, Energy Minister Alexander Nikolov told reporters.

He said Bulgaria would stick to the European Commission’s stance urging countries not to pay in rubles for Russian gas, something Russian President Vladimir Putin had demanded.

“Because all trade and legal obligations are being observed, it is clear that at the moment the natural gas is being used more as a political and economic weapon in the current war,” Nikolov said.

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Polish gas firm PGNiG confirmed that Gazprom had “completely stopped” supplies via the Yamal pipeline, adding that customers of the company were still getting the fuel in line with their needs.

“Cutting gas supplies is a breach of contract and PGNiG reserves the right to seek compensation and will use all available contractual and legal means to do so,” the company said.