German nationalization Gazprom subsidiary offers Dutch municipalities a way out

Municipalities no longer have to terminate their energy contracts with Gazprom Energy. Germany nationalized the European branch of the Russian state gas company yesterday. As a result, the Dutch branch is no longer subject to European sanctions, Energy Minister Rob Jetten (D66) told Parliament in a letter to be released later today.

At the end of April, the Ministry of Economy and Climate forced more than 300 municipalities, water utilities, schools and swimming pools to terminate their long-term gas contracts with Gazprom Energy. The Ministry decided that the Russian holding of the company shares purchased from ‘s-Hertogenbosch violated the European sanctions regulations by contract. Jetten considered it “undesirable” for the Netherlands to “contribute to the Russian treasury in this way”.

This has forced municipalities to enter the congested gas market in search of a new supplier. The municipalities that managed to sign a new contract paid the highest price. The municipality of Dordrecht lost an additional 3.3 million, for Utrecht no less than 11 million.

This was not only expensive but also inefficient. Municipalities bought their gas from the European gas market, some of which is still supplied by Russia. And since the price of gas was five, ten or even fifteen times higher all year, the switch actually brought additional income to Russia.

To limit Putin’s revenues, municipalities had to stick to relatively cheap, long-term gas contracts.

alone

Germany had placed Gazprom’s European branch under tutelage shortly before Minister Jetten gave the order, as Gazprom plays a crucial role in Germany’s energy security. The federal government replaced some of the personnel, removed all control of the Russian parent company, and also blocked the flow of money into Russia.

The German government changed the company’s name to Sefe (Securing Energy For Europe) and urged customers, including Dutch municipalities, to abide by contracts to keep the company healthy. The federal government hoped to sell Sefe in the coming months and considered expropriating Sefe if no interested parties came forward.

from research by news time It turns out that the Netherlands has a unique understanding of sanctions rules. Besides Germany, there were six other European countries that did business with one of Gazprom’s European subsidiaries, and none of these countries sanctioned Safe.

City councilors, the media and lawmakers have already drawn attention to Germany’s involvement in the ministry and warned of the financial risk as well as the negative impact for municipalities and educational institutions.

sour grapes

The parliamentary majority recalled Minister Jetten in September. They asked him to reconsider the mandate given to the congregations. As a result, the minister postponed the deadline for switching suppliers from October to January. At the end of last month, he delayed the deadline for another three months, bringing it to March. This relieved the more than three hundred parties who had requested an adjournment.

Grapes are sour for communities that often grit their teeth to carry out EZK’s orders. They paid millions of taxes for nothing. The minister wrote last month that he would talk to them about partial compensation. A spokesperson said the ministry could only give a concrete response early next year.