BERLIN, June 23 (Reuters) - Germany triggered the 'alarm stage' of its emergency gas plan on Thursday in response to falling Russian supplies but stopped short of allowing utilities to pass on soaring energy costs to customers in Europe's largest economy.
BERLIN, June 23 - Germany triggered the"alarm stage" of its emergency gas plan on Thursday in response to falling Russian supplies but stopped short of allowing utilities to pass on soaring energy costs to customers in Europe's largest economy.
Lower gas flows sparked warnings this week that Germany could fall into recession if Russian supplies halted altogether. S&P Global’s flash Purchasing Managers’ Index on Thursday showed the economy losing momentum in the second quarter. The government activates the second “alarm stage” of a three-stage emergency plan when it sees a high risk of long-term supply shortages. It includes a clause allowing utilities to immediately pass on high prices to industry and households and thereby help curb demand.
A move to the next phase has been the subject of speculation since Gazprom cut flows via the Nord Stream 1 pipeline across the Baltic Sea to just 40% of capacity last week. “The recent reduction in flows to Germany via the Nord Stream1 pipeline will, if it remains at these levels, lead to gas shortages this coming winter,” said Ole Hansen, head of commodity strategy at Saxo Bank.Russia may cut off gas to Europe entirely to bolster its political leverage, the head of the International Energy Agency said on Wednesday, adding Europe needed to prepare now.
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