Olaf Scholz says Germany should be ready for a sudden halt in gas supplies from Russia

Germany has begun making preparations for a possible stop in Russian gas delivery as fears grow over payment terms. On April 28, German Chancellor Olaf Scholz indicated that plans to limit Germany's reliance on Russian energy imports had begun long before President Vladimir Putin authorized the invasion of Ukraine.

He remarked in Tokyo during talks with Japanese Prime Minister Fumio Kishida that while Russian coal is already being phased out, gas is more challenging. It's worth noting that on April 27, Russia cut off gas supply to Poland and Bulgaria for failing to pay in rubles.

“Any disruption has an impact on the economy, the government is very clear about that. Whatever the Russian government decides on this, we can only speculate but that doesn’t make a lot of sense," German chancellor stated referring to Russian gas imports. “You have to prepare for it, and we already started this before the war broke out. We know what we have to do. That’s why it’s one of the things that wasn’t immediately included in sanctions,” he further added. 

Germany, which has reduced its reliance on Russian gas to 35% from 55% last year, has warned that a disruption in delivery would send Europe's largest economy into recession. The administration is phasing out Russian coal and has suggested that stopping oil imports from the country would be "manageable" in order to put pressure on the Kremlin over its invasion of Ukraine.

Tensions have been rising since Moscow cut off gas supplies to Poland and Bulgaria due to Moscow's insistence that deliveries be paid in rubles. Germany has stated that businesses should continue to pay into accounts in euros or dollars and leave the conversion to Gazprombank PJSC. This method isn't sure if it would be accepted.

Russia halted gas deliveries to Poland and Bulgaria

Gazprom, the Russian energy behemoth, has blocked gas exports to Poland and Bulgaria due to the nations' refusal to pay in rubles for supplies. Services will not be restored until payments are completed in Russian currency, according to the company. It comes after Russian President Vladimir Putin ordered that "unfriendly" countries pay in rubles for their gas. Poland acknowledged that supplies had been cut off, while Bulgaria stated it was unclear whether they had been cut off.

Image: AP