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Austrian Economy Minister says gas embargo would be ‘red line’

Austria's Economy Minister Margarete Schramböck has warned that a gas embargo against Russia would be unsustainable.

Published: 7 May 2022 16:13 CEST
An energy storage system at the petroleum and gas company OMV refinery in Schwechat.
An energy storage system at the petroleum and gas company OMV refinery in Schwechat. Photo: Dieter Nagl/AFP

In an interview with the Funke media group newspapers (cited in Handelsblatt), Austrian Economy Minister Margarete Schramböck stated that Austria would be strongly opposed to a gas embargo against Russia.

“We must not send any signals in the direction of a gas embargo if we know that we will not be able to sustain it – and neither we nor Germany will be able to sustain it,” she said.

Austria has already voiced support for an EU oil embargo against Russia, but a gas embargo remains a “red line”, as Austria still obtains 80 percent of its gas from Russia, and this has not changed since the beginning of the war.

READ ALSO: Austria throws support behind embargo of Russian oil

The minister also warned Germany from sending any further signals toward a gas embargo and indicated that there would be little solidarity in the event of a halt to Russian gas deliveries.

 “For us, the question is who will pay for it should the European Union dictate that the storage facilities must be filled,” Schramböck said.

“We can use Austrian tax money to make provisions for the storage facilities that serve Austrian needs. But we cannot use Austrian tax money to buy gas for Germany, France, or the Netherlands,” she said.

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ENERGY

Can Austria do more to tackle soaring energy prices?

Gas and electricity prices continue to rise in Austria - more persistently than in the rest of Europe. Is there anything the government can do about it?

Published: 7 June 2024 16:19 CEST
Can Austria do more to tackle soaring energy prices?

Energy prices in Austria have skyrocketed, with costs for natural gas surging by over 160 percent between April 2021 and April 2024. These soaring energy expenses have been a significant driver of inflation in the country. They have also placed a heavy burden on households and companies, affecting their financial stability. 

Despite the government’s introduction of measures such as an electricity price brake, the issue remains unresolved.

According to the Austrian Institute of Economic Research (WIFO), the energy industry in Austria suffers from a lack of competition and the different expectations between politicians and the public owners of the energy companies. 

“In the energy industry, there is a conflict of objectives that has not been taken seriously enough to date between the high dividends expected by public owners and the low electricity prices promised by politicians, as well as the extremely attractive salaries that employees in the energy industry are accustomed to”, WIFO said, according to Die Presse.

READ ALSO: How to save money on energy bills in Austria

“Competition has so far fallen by the wayside in Austria, and consumers have paid for this through (excessively) high energy prices”,” WIFO added.

What can the government do about this?

The centre-right ÖVP and Greens coalition wants to approve an amendment to ensure more competition in the sector. 

The proposed amendment by the ÖVP and Greens coalition aims to foster more competition in the sector. Under this plan, providers of electricity, district heating, and natural gas that are significantly more expensive than their competitors will be required to justify their high prices. Failure to do so will result in a decision by the cartel court.

The liberal party NEOS told Die Presse that the amendment was not enough. They call for the country’s competition authority to be strengthened and more price authority with monthly reports. 

READ ALSO: What are the rules for electric bikes in Austria?

The amendment would “not end the dominance of the provincial energy suppliers, who do not pass on the lower energy prices”, Neos energy spokesperson Karin Doppelbauer said. This “unholy alliance between state-controlled energy companies and the public sector endangers purchasing power and prosperity in Austria.”

However, according to WIFO, Austria still needs to fortify its economy against another fossil fuel price shock. The report underscores the potential benefits of this transition, stating that it can only be achieved by enhancing resilience and swiftly transitioning to a climate-friendly economy. 

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