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April 27, 2022

Russia to halt natural gas supply to Poland and Bulgaria

The suspension of the gas supplies comes as the two countries refused to make payments to Russia in rubles.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


Russian energy giant Gazprom has decided to suspend gas supplies to Poland and Bulgaria after they refused to pay for the fuel in Russian rubles, reported Reuters.

The move, which is effective from 27 April 2022, is seen as a major escalation in the standoff between Russia and Europe over energy supplies since the invasion of Ukraine.

Last month, Russian President Vladimir Putin demanded that “unfriendly” countries make payments in rubles, instead of dollars and euros, to the state-owned Gazprom .

Russia has decided to make good on a threat to terminate gas supplies after the European Union, in principle, rejected the demand to pay in rubles.

According to data from the European Union network of gas transmission operators, the Russian gas supply to Poland has now been cut, reported BBC.

Polish state gas company PGNiG, which imports the majority of its gas from Gazprom , said that the supply cut by the Russian firm breaches the contract.

As a result, PGNiG plans to take steps to reinstate the gas flow from Gazprom . It said it holds the right to pursue damages from the Russian firm for the contract breach.

However, Poland’s climate ministry said that the energy supplies in the country are secure.

Bulgaria imports more than 90% of its gas supply from Gazprom and it is now seeking alternative sources to Russian gas.

In a separate announcement, global commodities trader Trafigura Group said it plans to cease crude oil purchases from Russia’s state company Rosneft by 15 May 2022, reported Reuters.

The firm also plans to “substantially reduce” the purchase of refined products from Rosneft.

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