By: C. Oliveira
Russia invaded Ukraine on a major scale in February of this year. The invasion not only caused Europe’s largest refugee crisis since WWII, but it also has been affecting prices and resources all around the world.
Last year, almost 40% of natural gas used to heat homes and power businesses throughout the European Union came from Russia. Now, the European Union has imposed sanctions and vowed to eventually stop buying Russian gas.
To solve this, Europe is stacking up on fuel, paying high prices and asking citizens and companies to save energy. The benchmark wholesale price of natural gas in Europe, which has been incredibly volatile since the war in Ukraine began, is roughly four times what it was a year ago.
For example, in Switzerland, potential measures stated in the Federal Law on National Economic Supply, referred to by the Federal Department of Economic Affairs in an official document state that temperatures in gas-heated buildings can be no more than 19C, with water heated up to 60C.
Companies who go over their gas quotas could face punishment. Switzerland is also considering jailing anyone who heats their rooms above 19C for up to three years if the country is forced to ration gas due to the war.
In western Europe, a daily flow of 170 million cubic meters of gas has now been shut down completely. Those meters of gas constituted a flow that served Germany in particular. 55% of Germany’s prewar gas came from Russia.
The average European household is facing a monthly energy bill of 500 euros next year, triple the amount of 2021 according to analysts at Goldman Sachs.
Pakistan’s government is triggering rolling blackouts and power bills because it can no longer secure enough fuel. Shops in Bangladesh are closing at 8pm due to energy measures and Mexico’s government has bolstered subsidies to cushion residential electricity costs.
Gas deliveries that were scheduled for Pakistan or India are being redirected to Europe, where buyers are able to afford higher prices, according to energy traders.
Overall, the whole of Europe has been in crisis due to the war. When will this end?