Germany rejects Italy-linked gas storage claims amid winter supply dispute
European governments are struggling to contain higher energy costs and inflation as conflicts involving Iran, Ukraine and Yemen keep oil and natural gas prices elevated. Germany says its gas storage position remains adequate for winter, rejecting claims that delayed stockbuilding is tied to plans to privatise Uniper and SEFE.
Highlights
- Germany's economy and energy ministry rejects Italy's accusations that SEFE's procurement and storage activities are inflating European gas prices.
- German officials deny claims that storage neglect occurred during the privatisation of SEFE and Uniper and state SEFE is directed to source gas outside the EU when possible.
- Germany asserts European gas storage levels are adequate for winter and highlights additional supply options including LNG, pipeline imports, and network integration.
Government response to storage allegations
As reported by Reuters, the German government on Friday pushes back against accusations from Italy that it failed to fill gas storage ahead of winter in order to lower costs for its gas import companies before privatisation.A spokesperson for Germany's economy and energy ministry says the allegation that procurement and storage activity by SEFE is driving up European gas prices is firmly rejected. The spokesperson also says claims that Germany neglected to fill storage facilities during the privatisation of SEFE and Uniper are unfounded.
The spokesperson adds that SEFE is directed to source volumes from outside the EU whenever possible. According to the ministry, that approach minimizes the impact on the European market and on gas prices.
Winter supply outlook and wider market pressure
An Italian official says Rome spends hundreds of millions of euros to fill its gas storage ahead of winter, while an energy analyst at the same conference says Germany delays stockbuilding as it focuses on the privatisation of Uniper and SEFE, two key players in the storage-filling process.Germany maintains that European gas storage levels are sufficient even in the event of an exceptionally cold winter. The ministry says storage sites remain important, but Germany and the EU also have access to alternatives including LNG, pipeline imports and a highly integrated gas network.
Our earlier article on Mario Draghi’s warning about the policy trade-off between inflation control and long-term growth explained how tight monetary and fiscal settings can undermine the investment needed to make economies more resilient to recurring supply shocks. We noted his argument that central banks should keep rates no higher than necessary to restore price stability, while EU-level integration and targeted funding could help protect productive investment and productivity.
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