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  • European fuel costs have soared amid Ukraine crisis
  • Utilities face liquidity crunch
  • Germany will ‘do the whole lot potential’ to help corporations
  • Russian mobilisation triggers oil value bounce

BERLIN/LONDON, Sept 21 (Reuters) – Germany nationalised fuel importer Uniper (UN01.DE) on Wednesday and Britain stated it might halve energy payments for businesses in response to a deepening energy crisis that has uncovered Europe’s reliance on Russian gas.

Russian President Vladimir Putin added to the upward strain on energy costs by asserting a partial navy mobilisation, in the most important escalation of the Ukraine struggle since Moscow’s Feb. 24 invasion.

European governments had already earmarked virtually 500 billion euros ($496 billion) in the final 12 months to protect residents and firms from hovering fuel and energy costs, in accordance to analysis by think-tank Bruegel. learn extra

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Uniper has been among the many largest company casualties, with Germany earmarking a further 8 billion euros on Wednesday in the most recent step in a 29 billion euro bailout.

France, additionally among the many excessive spenders, will allocate 9.7 billion euros to take full management of utility EDF (EDF.PA).

Britain stated its new plan to help businesses would price “tens of billions of pounds.”

“We have stepped in to stop businesses collapsing, protect jobs, and limit inflation,” Britain’s finance minister Kwasi Kwarteng stated of the cap on wholesale electrical energy and fuel prices for businesses, which is about to apply from Oct.1 learn extra

More than 20 British energy suppliers have collapsed, many crumbling as a result of a authorities value cap prevented them from passing on hovering costs. learn extra

Uniper’s full nationalisation will contain the German authorities shopping for out Finland’s Fortum (FORTUM.HE) to give the state a 99% holding. learn extra

“This is clearly not sustainable from a public finance perspective,” Bruegel senior fellow Simone Tagliapietra stated of Europe’s total energy crisis invoice.

“Governments with more fiscal space will inevitably better manage the energy crisis by outcompeting their neighbours for limited energy resources over the winter months.”

‘DO EVERYTHING POSSIBLE’

German Economy Minister Robert Habeck, asserting the Uniper transfer and different steps to keep away from energy rationing this winter, stated: “The state will … do everything possible to always keep the companies stable on the market.” learn extra

The Uniper ationalisation offers the German authorities management of some property in Russia, a authorities spokesperson stated, including that it was analyzing what to do with these.

Germany was extra reliant than many others in Europe on Russian fuel, principally equipped by way of the Nord Stream 1 pipeline. Russia halted flows via the pipeline, blaming Western sanctions for hindering operations. European politicians name {that a} pretext and say Moscow is utilizing energy as a weapon.

The German authorities has already put Gazprom Germania, a unit of Kremlin-controlled Gazprom, and a subsidiary of Russian oil firm Rosneft (ROSN.MM) below trusteeship – a de facto nationalisation. Including Uniper’s bailout, the invoice quantities to about 40 billion euros.

WINDFALL TAX

Meanwhile, a debate is raging in Europe over whether or not oil corporations making document earnings due to the energy crisis ought to pay extra taxes to help shoppers deal with hovering inflation.

TotalEnergies’ CEO (TTEF.PA) Patrick Pouyanne stated on Wednesday that the French energy group was doubtless to face greater than 1 billion euros in extra levies if a proposed EU scheme to impose additional taxes on oil and fuel corporations was authorized. learn extra

European fuel costs on Wednesday hit 212 euros per megawatt hour (MWh), beneath this 12 months’s peak of round 343 euros however up greater than 200% from a 12 months earlier. Oil costs rose by as a lot 3% in early buying and selling, however later gave up these positive aspects. [O/R}

“The partial mobilisation (in Russia) is definitely a bullish factor as it increases the risks of a prolonged war in Ukraine,” stated Viktor Katona, lead crude analyst at Kpler. learn extra

Russia’s fuel flows to Europe by way of Ukraine had been regular on Wednesday whereas eastbound fuel flows by way of the Yamal-Europe pipeline to Poland from Germany had been halted. learn extra

In the United States, Democratic and Republican senators on Tuesday proposed that President Joe Biden’s administration use secondary sanctions on worldwide banks to strengthen plans for a value cap by G7 international locations on Russian oil. learn extra

Moscow has stated it might minimize all oil and fuel flows to the West if such a cap was carried out.

Several international locations have banned imports of Russian crude and gas, however Moscow has managed to keep its revenues via elevated gross sales to Asia.

The transfer by U.S. lawmakers got here hours earlier than Putin ordered Russia’s first mobilisation since World War Two, warning the West that if it continued what he known as its “nuclear blackmail” Moscow would reply with its huge arsenal. learn extra

($1 = 1.0087 euros)

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Reporting by Reuters bureaux; writing by Ingrid Melander; enhancing by Edmund Blair, Jason Neely and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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