Germany is facing increased costs of 5 billion euros ($5.4 billion) per year due to retaliatory sanctions imposed by Russia on gas imports, according to a report by German newspaper Welt am Sonntag.
Russia halted supplies to Gazprom Germania and its subsidiaries following Berlin’s decision to put the firm under trustee management, forcing authorities to buy supplies from alternative sources at higher prices. Citing industry experts, Welt am Sonntag estimates officials need to make up a shortfall of 10 million cubic meters per day, a figure supported by estimates from the German economy ministry.
“The quantities are procured on the market and at market prices. No information can be given on the exact amounts due to commercial confidentiality,” said a ministry spokesperson.
The report estimates initial additional expenses of approximately 3.5 billion euros a year, with further costs arising as a result of operations at the newly-ordered Rehden natural gas storage facility.
The paper also said that consumers would be expected to bear the brunt of the additional costs, with a gas levy expected in October.
German energy regulator Bundesnetzagentur has been forced to buy replacement gas on the market to maintain supplies across the country. Though facing increased costs, officials have confirmed that supplies are not at risk.