The energy crisis

Russia has become India’s third largest coal supplier thanks to big discounts offered for the commodity, overtaking other major producers, Reuters reported on Thursday.

India's coal imports from Russia jumped to just over 2 million tons in July, the agency said, citing data compiled by price reporting agency CoalMint, which constitutes a 10% month-on-month increase.

Russia was previously the sixth-largest coal supplier to India, with Indonesia, South Africa, Australia, the US, alternately featuring in the top five, Reuters says.

“Following the sanctions imposed by European countries, Russia has been struggling to sell its coal and is offering hefty discounts. This comes as a boon for the Indian buyers as they increase procurement of Russian coal at a time when there is shortage of domestic coal in the country," CoalMint said in a release published earlier this week.

Most of the coal arriving from Russia in July was thermal coal (1.4 million tons), and coking coal (0.29 million tons). Historically India imported more coking coal from Russia. But in July, CoalMint notes, the volumes of Russian thermal coal, which is used to generate power, increased dramatically, rising by 55% month-on-month and 500% year-on-year.

Russia’s physical proximity to India, its coking coal yields lower-per-ton steel production cost compared to supplies from countries such as Australia and the United States, CoalMint explains.

India's central bank last month introduced a new mechanism for international trade settlements in rupees, aiming to promote trade with Russia after Moscow was cut off from major currencies such as the dollar and the euro due to sanctions over the conflict in Ukraine. According to Reuters, India's imports from Russia have jumped nearly five-fold to over $15 billion since February.

www.rt.com/business/560223-india-boosts-russian-coal-imports

As energy prices in the UK are set to reach record highs, an anonymous group called ‘Don’t Pay UK’ has launched a campaign calling on 1 million Brits to stop paying their energy bills on October 1, when prices are expected to jump once again.

Campaign members say that at least 75,000 people have so far pledged to cancel their direct debits for gas and electricity in protest of escalating costs. The UK government is now slamming the campaign as “highly irresponsible,” as reported by The Independent on Thursday.

“This is highly irresponsible messaging, which ultimately will only push up prices for everyone else and affect personal credit ratings,” a government spokesperson was quoted as saying by the outlet.

“While no government can control global gas prices, we are providing £37bn of help for households including the £400 discount on energy bills, and £1,200 of direct support for the most vulnerable households to help with the cost of living.”

The government’s energy price cap, which is set by regulator Ofgem, is predicted to rise above £3,000 ($3,618) on October 1, a nearly 65% increase. Energy costs already rose by 54% earlier this year.

Don’t Pay UK estimates that around 6.3 million UK households will be thrown into fuel poverty by winter, with tens of millions of homes experiencing “fuel stress,” meaning they will spend more than 10% of their income on energy bills alone.

www.rt.com/news/560322-dont-pay-uk-campaign

Poland and Hungary have refused to support the EU’s plan to cut gas consumption by 15%, Reuters reported on Saturday, citing a document published by the Czech Republic, which currently chairs negotiations within the bloc.

EU countries last week agreed on a plan to reduce gas usage in order to fill storages amid concern of a possible shut-off of Russian supplies. The EU Council approved the plan on Friday. However, according to Reuters, the vote for approval only required a simple majority – meaning the support of 15 of the bloc’s 28 members – to be adopted.

Hungary, which is currently in talks to secure more gas supplies from Russia, had opposed the scheme from the very beginning. According to the document seen by Reuters, Budapest questioned the legality of the plan, claiming that it would affect the country's energy security.

Poland, meanwhile, initially agreed to cut consumption but on Friday voted against the plan, the agency reports. Warsaw called the legal basis of the document “defective” and said that decisions affecting the energy mix of EU countries should be made with the unanimous approval of all of member states.

www.rt.com/business/560346-eu-countries-oppose-gas-rationing

At least a third of Germans on low incomes may not be able to pay increasingly high energy bills, the German Tenants’ Association (DMB) has warned, urging the government to make changes to housing programs.

“That’s a hell of a lot of people,” Lukas Siebenkotten, the DMB’s chief, told newspaper Der Tagesspiegel on Sunday. “We’re talking about millions here.”

Siebenkotten urged the government to allow more people to claim housing benefits in the wake of rising energy prices. “Tenants must also be protected from the termination of contracts if they cannot make increased advance payments,” he said.

The remarks came after Klaus Mueller, the head of the Federal Network Agency, Germany’s gas regulator, warned that consumers should conserve at least 20% of gas in order to avoid shortages during the winter.

“In all other scenarios, we either face the threat of a gas shortage as early as December, or have low-level shortages at the end of the upcoming heating season,” Mueller said, describing current gas prices as “astronomically high.”

www.rt.com/news/560443-germany-tenants-heating-bills

The German economy is expected to lose more than €260 billion ($265 billion) in added value by 2030 due to the conflict in Ukraine and high energy prices, Reuters reported on Tuesday, citing a study by the Institute for Employment Research (IAB).

According to the study, Germany's gross domestic product (GDP) is set to be 1.7% lower in 2023, while the country will have about 240,000 fewer jobs. Employment is forecast to stay at this level until 2026, when the after-effects of the current crises are expected to end.

The country’s hospitality industry, already weakened by the Covid-19 pandemic, is expected to be hit the hardest as consumers’ purchasing power dwindles. Other sectors which are likely to be affected are the chemical industry and metal production, as they are highly reliant on energy supplies.

The study notes that energy prices are already up by 160% against those recorded prior to Russia’s military operation in Ukraine and the subsequent sanctions war between the EU and Russia. If these prices are to grow further, which they will if Berlin stops purchasing Russian energy, Germany’s 2023 economic output is expected to be nearly 4% lower than it would have been without the current pressures, according to the study.

www.rt.com/business/560520-german-economy-forecast-to-shrink

Food producers across Europe are contending with soaring energy prices, with that increase quickly felt in the pockets of consumers grappling with a cost-of-living crisis, Bloomberg reported on Tuesday.

According to the report, citing a Bank of England forecast, a third of UK households are set to spend more than 10% of incomes on energy, and now surging grocery costs are driving up food poverty.

“It is the domino effect that has happened with us having to take a huge increase on energy,” Ryan Peters, managing director of Brioche Pasquier UK, told the outlet. “We have to try and raise our prices to retailers a little bit, and unfortunately that goes on to consumers,” he said.

Kona Haque, head of research for commodities trader ED&F Man, warned: “I think the worst is still to come as energy prices rise. This winter will be a game changer and processing costs will likely go up.”

UK is facing Dickens-style poverty, ex-PM warnsREAD MORE: UK is facing Dickens-style poverty, ex-PM warns
Europe’s largest sugar beet producer Suedzucker AG has reported its first quarter revenues had been hit by a “substantial rise” in raw material, energy and packaging costs.

Companies turning soybeans, rapeseed and sunflower seeds into cooking oils have reportedly been slowing output in the UK and Europe and shifting production to other regions with lower energy prices.

Meanwhile, energy-intensive food factories across the continent could be forced to shut down if natural gas shortages spark rationing, Bloomberg warned.

www.rt.com/business/560571-europe-energy-costs-food-poverty