Aurelia Butler

Gazprom said flows would fall to 33 million cubic metres per day from 0400 GMT on Wednesday – a halving of the current, already reduced level – because it needed to halt the operation of a Siemens gas turbine at a compressor station on instructions from an industry watchdog.Germany said it saw no technical reason for the latest reduction, which comes as Russia and the West exchange economic blows in response to what Moscow calls its special military operation in Ukraine.The Dutch front-month gas contract, the European benchmark, closed 9.95% higher on news of the latest blow to Nord Stream 1. The pipeline, which has a capacity of 55 billion cubic metres a year, is the single biggest Russian gas link to Europe. The European Union has repeatedly accused Russia of resorting to energy blackmail, while the Kremlin says the shortfalls have been caused by maintenance issues and the effect of Western sanctions.Politicians in Europe have said Russia could cut off gas flows this winter, which would thrust Germany into recession and lead to soaring prices for consumers already grappling with higher prices for food and energy.Germany was forced last week to announce a $15 billion bailout of Uniper, its biggest company importing gas from Russia.PUTIN WARNINGPresident Vladimir Putin had foreshadowed the latest cut, warning the West this month that continued sanctions risked triggering catastrophic energy price rises for consumers around the world.Russia had already cut flows through Nord Stream 1 to 40% of capacity in June, citing the delayed return of a turbine that was being serviced by Siemens Energy in Canada – an explanation that Germany rejected as spurious. It then shut Nord Stream 1 altogether for 10 days of annual maintenance this month, restarting it last Thursday still at 40% of normal levels.The servicing of that first turbine is still a matter of dispute as it makes its way back to Russia through a tangle of paperwork and conflicting statements.Gazprom said on Monday it had received documents from Siemens Energy and Canada but “they do not remove the previously identified risks and raise additional questions”.It said there were also still questions over EU and UK sanctions, “the resolution of which is important for the delivery of the engine to Russia and the urgent overhaul of other gas turbine engines for the Portovaya compressor station.”Siemens Energy said the transport of the serviced turbine to Russia could start immediately, and the ball was in Gazprom’s court.”The German authorities provided Siemens Energy with all the necessary documents for the export of the turbine to Russia at the beginning of last week. Gazprom is aware of this,” it said.”What is missing, however, are the customs documents for import to Russia. Gazprom, as the customer, is required to provide those.”The German company said it saw no link between the turbine issue and the gas cuts implemented or announced by Gazprom. Gazprom did not immediately reply to a request for comment.The Kremlin said earlier that Moscow was not interested in a complete stoppage of Russian gas supplies to Europe, which is straining to fill its underground storage before the peak demand winter season.The disruption has raised the risk of gas rationing on the continent, with the European Union proposing to member states last week that they cut gas use by 15% between August and March compared with the same period of previous years.Russia is the world’s second largest oil exporter after Saudi Arabia and the world’s largest exporter of natural gas. Europe imports about 40% of its gas and 30% of its oil from Russia. More

The UK government must immediately provide additional support to households struggling with soaring energy bills or risk further damaging the wider economy, an influential cross-party committee of MPs said on Tuesday.The Commons business, energy and industrial strategy committee said the energy crisis was “racing ahead of the government” and that the £15bn support package it unveiled in May had been “eclipsed by the scale of the crisis”. It added that the crisis was partly attributable to the “negligent” and “incompetent” behaviour of industry regulator Ofgem. The report comes as forecasts for the increase in the government price cap on average energy bills have risen from about £2,800 in May to near £3,400 now, against a backdrop of soaring gas prices in recent months.The price cap is due to rise in October to roughly £3,244, before going up again next January amid a wider cost of living crisis.“To prevent millions from dropping into unmanageable debt it’s imperative that the support package is updated and implemented before October,” said Darren Jones, Labour chair of the committee. “[That’s] when the squeeze will become a full-on throttling of household finances.”The committee’s call comes as the ruling Conservative party is locked in a leadership contest between former chancellor Rishi Sunak and foreign secretary Liz Truss.Sunak has said the government must be responsible in its borrowing, defending increases in national insurance and corporation tax. By contrast, Truss wants to reverse tax rises and says borrowing is necessary right now despite warnings that it risks stoking inflation, which hit a 40-year high of 9.4 per cent in June. The committee said the government must do more to target support at the most vulnerable households amid warnings that more than a third could face energy poverty this winter. It criticised the support offered so far as it also helps the wealthiest households, including those with second homes.Its report urged the government to work with energy suppliers to ensure that low-income households that fall into debt have longer to repay, and an end to the practice whereby people who are struggling are moved to pre-payment meters with higher tariffs.Simon Francis of the End Fuel Poverty Coalition said he supported the report’s findings because the “crisis” facing households was “ongoing and severe”. “The energy bills crisis this winter is a nightmare scenario, but the government is sleepwalking into it,” he added.

Households face having £94 added to their bills from the cost of transferring customers from collapsed suppliers. The committee said the cost of bailing out Bulb, the largest energy supplier to go bust, should be paid for out of general taxation so as not to lead to further increases for all households. It called for Ofgem to report to the committee more regularly as the regulator attempts to overhaul how it oversees the market.The report also called on the government to “urgently” launch a national home insulation programme, describing it as a “permanent solution to bring down bills”.In response, Ofgem said it “welcome[d] the committee’s scrutiny of energy market regulation”, adding: “No regulator can . . . guarantee companies will not fail in a competitive market but we are working hard to reform the entire market, as well as closely scrutinising and holding individual energy suppliers to account.”The Department for Business, Energy and Industrial Strategy said “no national government can control global inflationary pressures” but that it had “introduced an extraordinary package of support to help households, including £1,200 each for the most vulnerable households”. More

LONDON (Reuters) – The final two candidates in the race to succeed British Prime Minister Boris Johnson clashed on Monday in a televised debate, during which they tore into each other’s tax and spending plans.Foreign Secretary Liz Truss, the bookmakers’ favourite to win the Conservative Party leadership election, told former finance minister Rishi Sunak his emphasis on balancing the government’s books would tip the economy into recession.”Crashing the economy in order to pay a debt back quicker would be a massive mistake,” Truss said.Sunak, whose resignation from government earlier this month set in motion Johnson’s downfall, said Truss’s plan to cut taxes was nothing more than a “sugar rush” for the economy that would be followed by a crash.The final stretch of a weeks-long contest has pit Sunak, a former Goldman Sachs (NYSE:GS) banker who has raised the tax burden towards the highest level since the 1950s, against Truss, a convert to Brexit who has pledged to cut taxes and regulation.Whoever triumphs when the result is announced on Sept. 5 will inherit some of the most difficult conditions in Britain in decades. Inflation is on course to hit 11% annually, growth is stalling, industrial action is on the rise and the pound is near historic lows against the dollar.Their quarrel on Monday underlined divisions in Britain’s ruling party about the best way to manage the economy, with Truss pitching a continuation of Johnson’s big-spending ethos, and Sunak portraying the classic Conservative fiscal hawk.”Does anyone think that the sensible thing to do is go on a massive borrowing spree worth tens of billions of pounds and fuel inflation even further?” asked Sunak, who repeatedly interrupted Truss.Truss said she would challenge the economic orthodoxy of Britain’s powerful finance ministry and dismissed Sunak’s warnings about her plans as “project fear” – a line used by Brexit supporters during the 2016 referendum.A snap opinion poll of 1,032 voters from Survation showed 39% of the British public thought Sunak performed best during the debate, compared with 38% who said Truss did.Among Conservative voters, 47% thought Truss did best, with 38% for Sunak.A YouGov survey of Conservative Party members published last week showed Truss held a 24-point lead over Sunak in the race to become leader.The opposition Labour Party said both candidates had trashed the Conservatives’ record in government during the debate, and that neither had offered a plan to tackle a worsening cost-of-living crunch. More

BUENOS AIRES (Reuters) – The head of the International Monetary Fund on Monday described a meeting with Argentina’s economy minister, Silvina Batakis, as “productive,” amid a deepening economic crisis afflicting South America’s third-biggest economy.IMF Managing Director Kristalina Georgieva added in a post on Twitter (NYSE:TWTR) that she welcomes Batakis’ efforts “to strengthen fiscal sustainability” in the country. More