'It would be a disaster' - Germany’s biggest gas company refuses to rule out energy rationing

·Breaking News Editor, Yahoo News UK
·3 min read
  • Russia announced last week it was indefinitely shutting down the Nord Stream 1 pipeline, one of the biggest suppliers of gas to Germany.

  • Incoming prime minister Liz Truss has previously ruled out energy rationing in the UK.

  • The Kremlin has warned gas supplies will not be resumed until western sanctions are lifted - in contrary to their previous claims that the cut in supply was due to technical difficulties.

View towards Nord Stream 1 Baltic Sea pipeline and the transfer station of the Baltic Sea Pipeline Link in the industrial area of Lubmin, Germany, August 30, 2022. REUTERS/Lisi Niesner
Russia has cut off Nord Stream 1, a vital pipeline which was aa major supply route to the continent. (AP)

Germany's biggest gas company has refused to rule out energy rationing following Russia's decision to indefinitely halt gas flows via the Nord Stream 1 pipeline.

Uniper said it is considering legal action against Moscow's giant Gazprom to compensate its shareholders for a 90% drop in their market value following a sharp drop in Russian gas supply since June.

Europe's gas prices surged on Monday after Russia stopped pumping via Nord Stream 1, a major supply route to the continent.

"We cannot rule out that Germany might look at rationing gas as something that might have to be considered," CEO Klaus-Dieter Maubach said during a gas conference in Milan.

"We know that the government wants to avoid this as much as possible because that would be a disaster for so many reasons," he added.

Before Vladimir Putin ordered the invasion of Ukraine on 24 February, Germany imported huge amounts of its gas from Russia.

Read more: Germany to enforce heating limits and turn off public lights amid Russian gas crisis

Kremlin spokesman Dmitry Peskov attends an annual end-of-year news conference of Russian President Vladimir Putin, in Moscow, Russia, December 23, 2021. REUTERS/Evgenia Novozhenina
Kremlin spokesman Dmitry Peskov blamed the "collective West" for Russia's decision to shut off the important pipeline. (Reuters)

In 2021 Russia accounted for 55% of its gas imports, although by June of this year that number declined to 26%.

Berlin announced new measures last week to conserve gas stores for the winter, including turning off lights in public spaces.

Kremlin spokesman Dmitry Peskov blamed the "collective West" for Russia's decision to shut off the important pipeline.

He told the Interfax news agency on Monday: "The problems pumping gas came about because of the sanctions western countries introduced against our country and several companies.

"There are no other reasons that could have caused this pumping problem."

Peskov added that the reinstatement of gas supplies via Nord Stream 1 would “undoubtedly” be dependent on the west lifting its sanctions on Moscow.

The statement appeared to contradict previous Russian claims that the drop in supply was down to technical faults - as had previously been claimed - and was instead politically motivated.

European nations have been imposing increasingly stringent sanctions on Russia since the war in Ukraine

The EU had already agreed to cut its use of Russian gas by 15% over the winter.

Liz Truss M.P. at the Queen Elizabeth II Centre in London after it was announced she is the new Conservative party leader, and will become the next Prime Minister. Picture date: Monday September 5, 2022.
Incoming UK prime minister Liz Truss previously ruled out gas rationing. (PA)

Meanwhile, incoming prime minister Liz Truss previously ruled out gas rationing, telling a hustings event last week: "I do rule that out. Yes."

The government produced a “reasonable worst case scenario” for energy shortages in August, in which it warned businesses and potentially even consumers could face blackouts during the winter as power supplies are constricted.

Officials said that without rationing, the UK could see blackouts last for days in January if a cold snap was to combine with gas supply shortages.

Theresa May’s former chief of staff Gavin Barwell said Truss was “crazy” to rule out energy rationing.

He tweeted: “So if it is a cold winter and there simply isn’t enough energy to go round – which is a real risk – we are just going to have random blackouts rather than the government rationing non-domestic use so that vulnerable people don’t find themselves without heating.”

Her rival Rishi Sunak was more cautious in his plan, telling the audience: "We shouldn't rule anything out" when asked the same question.

He added that leadership "starts by being straight with the country about the economic challenges", and told those gathered: "I've not chosen to say the things that people may want to hear, I've said the things I believe our country needs to hear.