Gazprom wants to ramp up deliveries

Status: 08.11.2021 10:40 a.m.

In October, energy prices for households climbed again to a record level. Gas customers can now hope that additional deliveries from Russia will have a positive effect.

After months of the energy crisis, gas customers in Europe can hope for additional energy supplies from Russia from this week on. Almost two weeks ago, under pressure from rising prices and poorly filled storage facilities, Russian President Vladimir Putin ordered the state gas giant Gazprom to replenish reserves in Germany and Austria. First the domestic supplies should be replenished. But now Gazprom should also open the valves for Europe.

Shortly before the start, a spokesman for Putin confirmed that the plan was in place and that Gazprom would deliver more than the agreed mandatory quantities after November 8th. The Federal Association of Energy and Water Industries had also welcomed Moscow’s announcement. At the end of October, according to the association, the plants supplied by Gazprom in Germany were only 21 percent full, below average compared to other gas storage facilities.

Record prices not in Russia’s interest?

As a result, Russia has been accused of driving up prices by holding back gas. As Russia’s most important woman in gas exports, Jelena Burmistrowa, head of Gazprom Export, repeatedly denied responsibility for the energy crisis. Burmistrowa said that anyone who “speculates about Gazprom’s malicious acts” is far from reality.

Russia kept pointing out that there was a global gas crisis. The reasons lie in the recovery of the economy after the restrictions caused by the pandemic. There is a hunger for energy, especially in Asia. Last but not least, the US would have preferred to deliver additional liquefied gas there and not to Europe, said Burmistrowa.

Gazprom’s deputy chief also stated that Russia has no interest in extremely high gas prices. The “record prices” could accelerate the transition to renewable energies in the EU. The huge empire, which is dependent on petrodollars, wants to earn money for its national budget with fossil fuels for a long time to come.

No start date for Nord Stream 2

In Germany and in other EU countries, Russia was faced with political accusations that it was keeping supplies short in order to bring about the rapid commissioning of the finished Nord Stream 2 pipeline in the Baltic Sea. There is not yet a start date due to pending approvals. The Kremlin said Nord Stream 2 could ease the situation. At the same time, however, the government in Moscow emphasized that all the agreed quantities would be delivered regardless of this.

Customers in the West confirm that Russia delivers reliably. However, it is disputed whether Russia is really doing everything it can to deliver additional quantities. Meanwhile, the Russians emphasize that in view of the gas crisis they have already delivered more than agreed. Exports to Germany alone increased by 30 percent in the first nine and a half months compared to the same period in the previous year, it said.

Industry observers see Europe’s storage facilities currently still filled with around 82 billion cubic meters or 76 percent of active gas. That is about 15 percentage points less than the average level for the past five years. But Gazprom’s storage facilities in Germany and Austria, as CEO Alexej Miller admitted in a conversation with Putin, had hardly any gas left. Therefore it is now being delivered.

Germany is the largest Gazprom customer in the EU. The country bought around 46 billion cubic meters of gas from Russia in 2020, around a third of all consumption in Germany.

Record prices in October

So far there has been no relief in energy prices: According to calculations by the comparison portal Verivox, Germany’s private households had to pay more for heating, electricity and fuel in October than ever before. According to Verivox, the energy costs for a three-person model household with October prices projected for the whole year were 4549 euros, 35 percent higher than a year earlier.

Heating oil customers in particular suffered from the current development. Heating with oil has risen by 144 percent over the year. A significant price increase of 28 percent was also recorded for gas.

A few days ago, the comparison portal Check24 reported that other gas suppliers in Germany wanted to increase their prices. Since August, 98 basic gas suppliers have increased their prices or announced increases. A good six weeks ago, the portal was only 50. Consumers should expect a wave of gas price increases this winter, said Steffen Suttner from Check24.

The average increase was 17.3 percent. So far, a total of around 560,000 households are affected. According to the Federal Statistical Office, there are around 42.8 million apartments in Germany. Almost half of all apartments are heated with gas.

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