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Russia’s Gazprom: Gas price cap would lead to suspension of supplies to Europe

Sunday, 16 October 2022 4:18 PM [ Last Update: Sunday, 16 October 2022 4:58 PM ]

The file photo by AFP shows a worker for Russia's state-controlled gas company, Gazprom.

The head of Russia’s energy giant Gazprom has warned that the likely imposition of a price cap on Russian gas in Europe is in breach of contractual terms and would entail the termination of supplies to the energy-strapped continent.

Alexey Miller raised the alarm in an interview with Russian broadcaster Rossiya 1 on Sunday after the European Union introduced the eighth package of sanctions against Moscow which, among other things, sets a framework for capping the price of Russian seaborne oil exports at a level coordinated by the bloc’s allies in the Group of Seven (G7) countries.

“We are guided by the contracts that have been signed. Of course, such a unilateral decision is a violation of the essential terms of the contract, which entails the termination of supplies,” Miller told Rossiya 1.

The imposition of the price cap is scheduled to take effect on December 5 for crude oil and on February 5 for refined petroleum products. Some EU countries, including Hungary, were excluded from such measures as they import Russian oil through pipelines.

Moreover, the energy ministers of 15 EU countries sent in late September a joint appeal to the European Commission in which they advocated the introduction of a price cap for all gas imports into the EU, regardless of their origin, to curb rising energy prices.

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Russia

Kremlin: Citizens of pro-cap countries to pay

In a separate interview with the Russian broadcaster, Kremlin spokesman Dmitry Peskov warned that people living in the countries whose leaders joined a price cap on Russian gas would have to pay for the decision.

“Many countries are already facing the consequences of their hasty decisions. And there will be a price to pay for joining the supporters of this price cap, which the citizens of these countries will have to pay,” Peskov said in the interview with Rossiya 1.

Germany, Denmark and the Netherlands have opposed the price cap initiative, saying it will harm efforts to contain Europe’s energy crisis. European Commission President Ursula von der Leyen has underlined the need for a price cap only for Russian gas.

Early last month, Russia said gas supplies to Europe via the Nord Stream 1 pipeline would not resume in full until the Western countries reached a collective decision and lifted sanctions they had imposed on Moscow over its February-present military operation in Ukraine.

Making the announcement, the Kremlin spokesman blamed the European Union, the UK, and Canadian sanctions for Russia’s failure to deliver gas through the key pipeline.

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