Industry Ministry: Halt to Russian gas transit via Ukraine will not affect Czechia

The halt to Russian gas transit via Ukraine will not affect Czechia. It will mainly have a negative impact on Slovakia. Other European countries have secured gas supplies by other means. This follows from statements by the Ministry of Industry and Trade (MPO) and energy experts. Ukraine today halted the transit of Russian gas to the European Union and Moldova. Kyiv had long indicated that it did not intend to extend the agreement on the transit of Russian oil. It justified its decision by the armed conflict with Russia, which partly finances its war effort in Ukraine through the sale of commodities.

„Thanks to our earlier measures, strategic investments, robust infrastructure and secured alternative gas supplies, the halt to transit will not affect Czechia. We are closely monitoring developments in gas prices on wholesale markets and are in regular contact with traders,“ MPO spokesperson Marek Vošáhlík told the Czech News Agency.

Czech Radio's Radiožurnál, citing the Foreign Ministry's special envoy for energy security Václav Bartuška, said that the halt to transit would mainly affect Slovakia. According to Bartuška, the Czech Republic has been able to replace gas supplies from Russia since 2022. Gas reaches Czechia, for example, from the Netherlands and Norway, while the country also has contracts with Algeria. „If Russian gas flowed here, for example last winter or this winter, it was because it was exceptionally cheap. This gas may be more expensive than Russian gas, but essentially we do not expect any particular problems,“ Bartuška said.

Transport statistics from Net4Gas show that the overwhelming majority of gas imported into Czechia at the end of last year flowed in from the east, primarily from Russia. While most supplies to Czechia came from the west for most of the year, deliveries from Slovakia rose sharply from the beginning of November, accounting for around 95 percent in the final two months. According to experts, this is mainly Russian gas. Analysts contacted previously said the reason was also its lower price, as transport charges make imports via Germany more expensive.

Jiří Gavor, an analyst at ENA and executive director of the Association of Independent Energy Suppliers (ANDE), told the Czech News Agency that Russia, Ukraine and the existing buyers of Russian gas would bear the direct economic losses from the end of transit via Ukraine. In his view, Slovakia is in the most difficult position in terms of an immediate replacement. Nevertheless, Slovaks do not face a risk of a physical gas shortage either. At the same time, Gavor also believes the interruption of transit may affect Czechia.

„Central European energy markets, and therefore wholesale prices, are interconnected, and when a supply of cheaper Russian gas amounting to around 15 billion cubic metres a year disappears from them—roughly twice Czechia's annual consumption—it will naturally be reflected in higher prices across the entire region, not only in Slovakia,“ Gavor said.

He added that, unlike industrial producers, households would not feel the change immediately. „Czechia can partly mitigate these negatives through increased revenue from gas transit to Slovakia, but overall the negatives in the form of higher commodity prices will prevail,“ Gavor said.

Russian gas stopped flowing to the EU and Moldova via Ukraine today after the expiry of a five-year contract between Gazprom and Naftohaz at 08:00 Moscow time (06:00 CET). Ukraine's Energy Ministry announced the end of transit from 07:00 Kyiv time (06:00 CET), citing „national security“, Reuters reported.

In a New Year's address today, Slovak Prime Minister Robert Fico said that the halt to Russian gas transit via Ukraine would have drastic consequences for everyone in the European Union, but not for Russia. Last week, Fico threatened Ukraine with retaliatory measures, including cutting off electricity supplies, if Kyiv halted the transit of Russian natural gas to Slovakia. Slovakia's Economy Ministry said on Tuesday that Slovakia was prepared for the halt to gas transit via Ukraine.

Austria's gas grid operator also said on New Year's Eve that gas supplies in Austria were secured even after the end of the contract between Gazprom and Naftohaz, and that the energy sector was prepared for the new situation.