Mon, October 03, 2022

Poland’s Biggest Gas Supplier Ceases Operations in Poland

gas

On Wednesday, Russia will cut off gas supplies to Poland; it will escalate the stalemate between Moscow and Europe over energy supplies and the Ukraine crisis.

Moscow appears to be following through on a promise to cut off gas supplies to nations who refuse to pay in rubles, as Vladimir Putin has demanded. Europe has stated that doing so would violate sanctions and would significantly boost Russia’s hand. Poland has been particularly vocal in its condemnation of Russia during the conflict. PGNiG, Poland’s largest gas provider, has been warned that all gas shipments will cease on Wednesday. Minutes before, Gazprom, the Russian gas company, had warned Poland that it would have to pay for its gas supply on Tuesday – in Russian currency.

Ongoing Energy Crisis 

Prime Minister Mateusz Morawiecki told reporters in Berlin, “I can confirm we’ve received such threats from Gazprom, which are related among other things to the means of payment.”

“Poland is adhering to the agreements, and Russia may attempt to penalize Poland” by halting delivery. Traders evaluated the danger of Russia affecting other European countries; hence, European gas prices jumped as high as 17%. Cutoffs have been looking for weeks, but there was some hint last week that the European Union was considering a way out of the impasse.

The payments for April gas supply — the first batch for which the new terms apply — are due in late April and early May, and European politicians and businesses are still figuring out how to respond. Europe is heavily reliant on Russian gas and has thus far mostly avoided sanctions on the energy sector.

“The prospective cut might create a precedent for further cuts in response to Russia’s request for payment in rubles,” said Patricio Alvarez, a Bloomberg Intelligence analyst. There was no quick response from Gazprom.

Poland has been preparing for life without Russian gas; hence, the government said on Tuesday that it had sufficient fuel in store. Warsaw has advocated for stronger measures against Russia, but other EU countries have objected.

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