Russia to Cut off Gas Pipeline to Poland and Bulgaria amid Payment Dispute in Roubles

Russia will cut off gas to Poland and Bulgaria on Wednesday posing as major standoff escalation between Moscow and Europe over energy supply and the war in Ukraine.

Moscow made a threat halt gas supplies to continues that refuse President Vladimir Putin’s new demand to pay for the fuel in roubles.

Earlier the European Union rejected the demand in principle but now payment deadlines are starting to fall due, governments across Europe need to decide whether to accept Putin’s terms or lose crucial supplies – and run the risk of energy rationing.

Meanwhile, European gas prices has climbed as much as 17%.

“This is a turning point that has been accelerated by Russia today,” said Piotr Naimski, Poland’s top official for strategic energy infrastructure.

Focus now turned to particularly Germany which is heavily depended on Russian gas. However, as of yet there is no immediate reaction from Berglin.

“Any buyer rejecting the new payment procedure out of hand is running a very real risk of supplies being cut,” said Katja Yafimava, senior research fellow at the Oxford Institute for Energy Studies as reported by Bloomberg.

“The decision of Russia to stop gas supplies to Poland and Bulgaria represents an historical turning point in the bilateral energy relationship and might well represent the preview of similar moves coming up vis-a-vis other European countries in coming weeks,” said Simone Tagliapietra, a researcher at the Bruegel think tank.

“European governments now need to deploy all emergency measures they have at their disposal, both on the supply and demand side to ensure security of supply.”

The first ruble payments are due in late April and May. However, companies’ individual payment schedules have not been disclosed.

Polish news outlet reported earlier that the deadline for Poland’s main gas company PGNiG’s fell on Friday, and Gazprom said on Tuesday the payment was due immediately.