France's economy minister has warned people will have to “pay more attention to consumption” after the price of natural gas in Europe jumped by 60
France’s economy minister has warned people will have to “pay more attention to consumption” after the price of natural gas in Europe jumped by 60 percent on Monday and oil is close to its record of 2008, in the wake of the crisis in Ukraine.
The price of natural gas hit a new all-time high on the European market on Monday, as the US and EU discussed energy sanctions on Russia following its invasion of Ukraine on 24 February.
Russia supplies 40 percent of European gas imports and fears over disruption to that supply have pushed the European market benchmark, the Dutch TTF, to a new record high of €345 per megawatt hour (MWh).
The price of oil has also risen because of a possible Western embargo on Russian oil.
A barrel of North Sea Brent crude oil approached $140 (€128) on Sunday evening, close to its all-time high of $147.50 in July 2008.
2 euros a litre?
There are fears in France that the 2-euro per litre threshold for petrol will soon be reached.
“It’s in everyone’s minds,” warned Michel-Édouard Leclerc, head of the Leclerc hypermarket group which includes some 660 service stations. “It will happen this week in Paris,” he told Francinfo radio on Monday.
“There will be an increase of around 10 cents a litre this week, in just about every service station in France.”
Boycott of oil and gas
Two weeks after the Russian incursion, Ukranian president Volodymyr Zelensky urged his Western allies to levy additional sanctions against Moscow, including boycotting its lucrative oil and gas sector.
“Russian oil smells of Ukrainian blood today,” foreign minister Dmytro Kuleba said in a televised address on Sunday. “Buying it is financing Russian war crimes.”
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Europe in effect pays Russia some 700 million euros per day for oil and gas supplies.
Chief US diplomat Antony Blinken said earlier on Sunday that the United States and the European Union were “very actively discussing” targeting Russian fossil fuels as the conflict intensifies.
Europe divided
Europeans, however, are cautious about turning off the taps.
Germany, which holds the rotating presidency of the G7, imports an estimated 55 percent of its gas and 42 percent of its oil and coal from Russia.
Foreign minister Annalena Baerbock said an energy boycott would be pointless since it could not be sustained long term.
“It’s no use if in three weeks we find out that we only have a few days of electricity left in Germany and therefore we have to go back on these sanctions,” she told a German public broadcaster.
In a separate interview, she added that Germany was prepared “to pay a very, very high economic price” but “if tomorrow in Germany or Europe the lights go out, it’s not going to stop the tanks”.
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Limit consumption?
Europe is looking for other ways to reduce its dependence on Russian gas and oil.
Catherine MacGregor, the head of French energy giant Engie, said that lowering the heating by one degree would have a “not insignificant” effect on gas consumption.
Speaking on France Inter radio on Monday she said it was time to “accelerate biomethane and renewable energies”.
“Windpower is locally-produced energy and the resources are virtually unlimited. We must move on that and coal must be taboo as far as possible.”
MacGregor maintained that if sanctions against Russia were indeed extended to its energy sector, “We will be able to get through the winter because it’s coming to an end.”
But in the medium term “Europe could run out of gas next winter”.
A new world
Economy Minister Bruno Le Maire called on the French to make a collective effort.
“We will all have to make an effort. We all have to realise that we are entering a new world,” he told BFM TV.
“The Minister of the Economy is not here to say to do this or that. I am simply saying that collectively we are all going to have to be much more careful with our energy consumption.”
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