Poland and Bulgaria have accused Moscow of “blackmail” after the Russian energy giant, Gazprom, cut off gas exports to the two countries.

Poland’s Deputy Foreign Minister, Marcin Przydacz disclosed that Russia is seeking to “foster divisions” between Western allies. This was due to Poland and Bulgaria’s refusal to pay for gas in Roubles.

Last month (March), Russian President, Vladimir Putin, announced that all energy payments must be made in the Russian currency, Roubles. The move was designed to shore up the country’s faltering currency, battered by Western sanctions. But the decision by Mr. Putin has been fiercely counteracted by European nations.

In a statement issued on Wednesday, April 27, 2022, Gazprom noted that it has “completely suspended gas supplies” to Poland and Bulgaria in line with the decree issued by Mr. Putin. The company also warned countries which are transit states for Russian gas that any unauthorized withdrawal of gas intended for European nations would see supplies reduced by an equivalent amount.

Response from Poland and Bulgaria

Polish state gas company, PGNiG confirmed that Gazprom’s supplies to the country halted and warned that it reserved “the right to seek compensation” and would use “all available contractual and legal means to do so”. PGNiG bought 53% of its gas imports from Gazprom in the first quarter of this year 2022, but Warsaw (Poland’s capital) said it can get gas from other sources. It described the suspension as a breach of contract, adding that the company would take all the necessary steps to reinstate the gas supply.

Bulgarian Prime Minister, Kiril Petkov, intimated that the country is reviewing all of its contracts with Gazprom, including for transit of Russian gas to Serbia and Hungary, emphasising that “one-sided blackmail was not acceptable”. Bulgarian Energy Minister, Alexander Nikolov, also said Russia is using gas as a “political and economic weapon in the current war” Bulgaria’s capital, Sofia, which relies on Gazprom for more than 90% of its gas supply, disclosed in an overnight notice that steps have been taken to find alternative sources but no restrictions on gas consumption were currently required.

Western Condemnation

A host of Western leaders have condemned Gazprom’s move which came in on Wednesday (April 27, 2022) morning.

UK Deputy Prime Minister, Dominic Raab, told reporters that the decision to cut off gas supplies would have “a very damaging effect on Russia”. He added that the decision would further isolate Russia, leading it to become “an economic pariah”.

In a statement, EU Commission President, Ursula von der Leyen noted that Gazprom’s move was “unjustified and unacceptable”, and argued that the decision showed “once again the unreliability of Russia as a gas supplier”. She added that the bloc is “prepared for this scenario” and that European leaders are working to “ensure alternative deliveries and the best possible storage levels across the EU”.

Ahead of Gazprom’s move, Ukrainian President’s Chief of Staff, Andriy Yermak, accused Russia of “beginning the gas blackmail of Europe”. Mr. Yermak averred Moscow is seeking to use energy resources as a “weapon” and called on the EU to “impose an embargo on energy resources, depriving the Russians of their energy weapons”. But Vyacheslav Volodin, Speaker of the Duma (the lower house of Russia’s parliament) praised Gazprom’s move and urged it to take similar action against other “unfriendly” countries.

Measure Taken

According to Warsaw, it has “taken some decisions many years ago to prepare for such a situation” and PGNiG revealed that its underground gas storage was almost 80% full and, with summer approaching, demand was lower.

Europe depends on Russia for more than a third of its gas needs and Gazprom holds a monopoly on pipeline supplies in Russia. While the EU has been firm that it will not comply with Mr. Putin’s demands that energy payments be made in Roubles, several European nations, including Slovakia and Hungary have reached workaround deals with Gazprom.

The two countries (Slovakia and Hungary) will pay into a euro-denominated account with Gazprombank, a subsidiary of the energy giant, which in turn will deposit the amount in Roubles.