Introduction: Germany declares 'early warning' for gas emergency
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Germany has declared an “early warning” that it could be heading for a gas supply emergency and said the measure was aimed at preparing for a possible disruption of natural gas flows from Russia.
Economy minister Robert Habeck said supplies had been safeguarded for the time being and that Germany was closely monitoring supply flows with market operations.
This came as Russia’s top lawmaker said Russia should sell its oil, grain, metals, fertiliser, coal and timber for roubles on global markets where it is profitable to do so. President Vladimir Putin has ordered that natural gas exported to Europe or the United States be paid for in roubles. Energy ministers from the G-7 group of industrialised nations have rejected this demand.
The speaker of Russia’s lower house of parliament, Vyacheslav Volodin, said today:
If you want gas, find roubles.
Moreover, it would be right, where it is beneficial for our country, to widen the list of export products priced in roubles to include fertiliser, grain, food, oil, coal, metals timber etc.
A growing number of German companies are planning to raise their prices over the next three months, pointing to a further rise in Germany’s inflation rate, according to the Munich-based Ifo institute.
Its price expectations measure recorded a new record high of 54.6 points, up from 47.6 points in February. Consumers have to brace for sharp price increases from food retailers in particular (price expectations rose to 94.0 points and to 68.2 points among other retailers).
Timo Wollmershäuser, head of forecasts at Ifo, said:
Russia’s attack on Ukraine is driving up not only energy costs, but also the price of many agricultural raw materials.
This makes it likely that the rate of inflation will rise to well beyond 5% this year. Germany hasn’t experienced such a spike in over 40 years, not since the rate of inflation climbed to 6.3% following the second oil crisis in 1981.
German inflation hit 5.1% last month and is forecast to have risen to 6.3% in March, with data due at 10am BST.
Ifo said price pressures climbed across all sectors. In wholesale, price expectations rose to 78.1 points, in manufacturing to 66.3 points, in construction to 48.9 points, and in the service sector to 42.7 points.
The German Dax rallied 2.8% yesterday and France’s CAC rose 3% while the FTSE 100 index in London lagged with a 0.86% gain and the Dow Jones on Wall Street rose nearly 1%.