Europe experiences fuel prices rising as Russia cuts natural gas supplies

BERLIN — Jörg Mertens knew that the West’s opposition to Russia had caused energy prices to skyrocket across Europe. But his August bills made him silly.

His energy had increased by 70 percent.

“I̵[ads1]7;m scared,” said the 60-year-old Munich man, his voice breaking. After rent, the increased costs – about $190 a month for electricity and heat, compared with $112 before – will leave him with $366 a month for food, medicine and transit during Germany’s worst bout of inflation since the 1970s.

“I have to buy less food,” said Mertens, who has spinal cord disease and survives on a fixed early retirement pension. “In the winter, how do I pay the rent?”

Across Europe, Russian President Vladimir Putin’s weaponization of natural gas exports — holding back shipments, Europeans say, to punish the West for imposing sanctions on Russia — is dropping a bombshell on consumers in some of the richest countries on earth. The nations that have been hardest hit – including Germany, Britain, Italy and the Netherlands – have seen taxpayers hit with year-on-year increases as high as 210 percent, even as officials and analysts warn of the prospect of rationing and blackouts if the winter.

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In Britain, cash-strapped residents are abandoning pets as schools warn that rising energy costs mean they can no longer afford new textbooks. In Poland, officials are weighing the distribution of anti-smog masks as Poles consider burning trash for warmth in winter. In Germany, residents of old West Berlin are dusting off coal and wood-burning stoves that once served as insurance against the Russians targeting energy supplies during the Cold War.

Several European countries are suffering from shortages and sky-high prices of a fuel of last resort: wood. Thieves, spotting the opportunity, steal logs from trucks; Fraudsters set up fake websites, posing as resellers, to trick desperate consumers. Wood-burning stoves and ovens in several countries are almost completely sold out.

“Firewood is the new gold,” said Franz Lüninghake, 62, a systems administrator in Bremen, Germany, who has a wood-burning stove on back order. His estimated energy bill for next year? $4,500 – up from $1,500 for the 12 months to May.

Norbert Skrobek, a chimney sweep in Berlin — a licensed technician who dons a vintage uniform to inspect and consult on wood- and coal-burning furnaces — said he has seen an increase in demand as Berliners refurbish old heaters and install new ones. A flood of locals buying portable heaters, he fears, could trigger dangerous carbon monoxide leaks if improperly installed or used.

“I am convinced that we will have to carry some people horizontally this winter,” he said.

European nations have scrambled to reduce consumption, replenish reserves and replace Russian natural gas, while pledging hundreds of billions of euros in financial aid to consumers and businesses. To stem the economic bleeding, the German government is even moving to add hundreds of thousands of people to the housing subsidy.

But these steps are unlikely to fully compensate for the far higher costs, and analysts warn of a rise in poverty, a devastated middle class, rising national debt and greater environmental damage.

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Cuts in shipments of Russian natural gas, used to power power grids and heat homes in many parts of Europe, are the biggest factor driving prices up. But it has been compounded by other setbacks, including planned shutdowns of French nuclear plants to fix corrosion. French authorities have warned the public to prepare for the possibility of rolling blackouts later this year. To save energy, the Eiffel Tower – a towering lantern that usually illuminates the City of Lights until 1am – will be switched off by 11.45pm

From Naples to Nuremberg, Germany, consumers are opening their energy bills to sticker shock.

“Putin has played everything to the top. So every cut in Russian gas supplies has given us price jumps,” Klaus Müller, head of Germany’s energy regulator, told The Washington Post. “That’s the price of this war.”

Europeans were already financing a transition to renewable energy sources through taxes and tariffs on their electricity bills, paying more on average than their American counterparts. Now the gap has increased. As winter approaches, the economic pain could test the continent’s resolve on sanctions to punish Russia for invading Ukraine.

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High prices have become a key issue for European parties known for cozy relations with Moscow, raising doubts in inflation-weary countries about the wisdom of the sanctions. Matteo Salvini, leader of Italy’s right-wing League party, part of a coalition favored to win national elections this month – suggested Italians were paying too high a price. The generally pro-Russian far-right in Germany, meanwhile, is mobilizing a “winter of rage”, calling on taxpayers to take to the streets against crippling energy costs.

“The enemies of democracy are just waiting to abuse the crisis to spread doomsday fantasies, fear and uncertainty,” Germany’s Interior Minister Nancy Faeser told the Rheinische Post last week. “It is irresponsible to fuel the fears of people who are hit particularly hard by high prices.”

Ahead of an unpredictable winter, European consumers are getting desperate.

In Great Britain, a recent research showed that almost one in four people planned to keep the heat off this winter. The country, unlike some European neighbors, does not depend on Russia for its natural gas – it makes up less than 4 percent of its supply. But the energy market has been buoyed by high prices driven by shortages elsewhere. Domestic gas prices rose by 96 per cent and electricity prices by 54 per cent in the year to July.

Prime Minister Liz Truss, in her first major announcement as head of government last week, said consumers’ energy bills would be frozen for two years. The typical household would pay no more than $2,885 a year, the government said, a saving of more than $1,000 a year on commercial rates.

Ed Trewhitt, 55, owner of Brickyard Bakery in Guisborough, England, said it won’t be enough to save his business. If energy prices stay this high, he said, he will be forced to close next year. The cost of running his bread oven has doubled in the past year to $2,300 a month. This rise comes on top of Britain’s soaring inflation, which is at a 40-year high.

“Energy prices are crippling, but that’s about it. Flour costs alone have gone up 80 percent in the last year,” Trewhitt said. “It’s just not sustainable.”

Even as the heat scorched Europe this summer, panicked buyers began hoarding firewood weeks ago, sending prices soaring.

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In the rural village of Ag, Hungary, two hours southwest of Budapest, Nikoletta Kelemen said the price of firewood — used almost exclusively as winter fuel — has nearly doubled. A single tree is worth lighting, the 35-year-old NGO worker said, now costs about half the average village salary of $249 a month.

“I imagine it will come down to burning furniture,” Kelemen said.

Wood theft in the forests around Stuttgart in Germany has increased, according to Götz Bülow von Dennewitz, the count who oversees forest management in the area.

“They drive in with a trailer or a tractor and a truck and a crane, have professional equipment, saw together and drive it out,” he said. “Audacity prevails.”

The authorities have warned that illegal cutting and emissions from older stoves make wood burning far from environmentally friendly. But many here increasingly feel as if they have little choice.

On the last day of August, Russia shut down the Nord Stream 1 pipeline – the main link for gas to Germany – claiming a need for maintenance. This month, Putin blamed Western sanctions for delays and warned he would cut energy supplies completely if the West followed through on promises to impose price caps on Russian energy exports.

“We will not supply gas, oil, coal, fuel oil – we will not supply anything,” Putin said during an economic forum in the Pacific city of Vladivostok, Russia.

Germany, headed for recession, is ahead of schedule when it comes to filling up its gas reserves. But a bitterly cold winter can still lead to hardship. If the government imposes rationing, officials say, it will put citizens ahead of industry.

The German government this month also rolled out a €65bn aid package to help struggling households – the third in seven months – while pledging to claw back excessive profits from suppliers.

But analysts say the package could prove to be limited help for millions. The aid checks will not go out until December, and the Germans will have to pay for the increases now. And for many, poverty researcher Christoph Butterwegge said, the one-time checks won’t fully cover the price increases.

He expects many German households to pay 20 to 30 percent of their income on energy in winter, increasing the proportion of energy poverty, defined in Germany as anyone paying more than 10 percent of their net income for power and heat.

“There will be poor people who will face the option of either starving or freezing,” Butterwegge said.

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Mertens should receive about $300 from the new package in December, not enough to offset the $390 in extra energy costs he’ll pay between now and then. Unless prices go down, or the authorities step in again, he will be billed for at least an extra $78 a month starting in January. More, if prices rise further.

It’s money he doesn’t have. Wealthier households can get by, but he lives on the margins, where every euro counts. It’s about choices like cutting back on food and soap, or skipping replacing his tattered winter boots.

“Such thoughts,” he said. “They come at you like a hot wave and leave you gasping for air.”

In the Berlin neighborhood of Kreuzberg on a recent morning, 41-year-old scientist Vinzenz Schönfelder watched as Skrobek inspected his old white and gold furnace. Built in the 1880s and unused for decades, the wood-burning stove is Schönfelder’s fallback in the dire event that Germany runs out of heating gas this winter.

“What scares us the most is that the power supply is no longer stable,” he said.

It reminded him, he said, of growing up in East Germany, where residents were more prepared for occasional blackouts. “The last time I experienced this [uncertainty] was like a kid in the 80s.”

He resents what he describes as Germans once again being caught in the middle of what he sees as a battle between Washington and Moscow.

The sanctions “have not ended the war, and they have not significantly weakened Russia,” he said. “At the same time, they have really hurt Germany enormously.”

Meanwhile, he said, “Americans are watching comfortably.”

Adam reported from London. Meg Kelly in Berlin contributed to this report.

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