The Finnish state-owned energy firm warned Friday that Russia will shut off natural gas to Finland after the Nordic country ignored President Vladimir Putin’s demand for payment in rubles. The shutdown, which occurred the same week that Finland asked for NATO membership, is the latest escalation in the conflict in Ukraine over European energy.
Finland is the most recent country to lose access to an energy supply that is needed to generate electricity and power the power sector. Poland and Bulgaria were cut off late last month, but both nations had planned for the loss of gas or were able to obtain supplies from neighbouring countries.
Putin has stated that unfriendly foreign customers should create two accounts with state-owned Gazprombank, one to pay in euros and dollars as indicated in contracts, and the other to pay in rubles. Eni, the Italian energy corporation, announced this week that it was beginning steps to create a euro and ruble account.
The European Commission, the EU’s executive arm, has said that nations paying in the currency specified in their contracts and publicly declaring that the payment process is complete are not subject to EU sanctions. However, it claims that creating a second account in rubles would be a violation of the rules.
As a result, governments are trying to figure out what to do next. Finland has rejected the new payment method, and energy firm Gasum has announced that its supply would be cut off on Saturday.
According to the Finnish broadcaster YLE, natural gas accounted for only 6% of Finland’s total energy consumption in 2020. It is almost entirely imported from Russia. This is little compared to large clients like Italy and Germany, which receive 40% and 35% of their gas from Russia, respectively.