Germany pledges to end dependency on Russian oil by late summer

Total cut-off of Russian gas could mean a 5 percentage point loss in economic output and higher inflation

Tanks for producing biogas at the harbour in Hamburg, Germany, on April 19. AP

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Germany says it is making progress in weaning itself off Russian fossil fuels and expects to end crude oil imports from the country by late summer.

Economy and Climate Minister Robert Habeck said on Sunday that Europe’s largest economy had reduced the share of Russian energy imports for its demands to 12 per cent for oil, 8 per cent for coal and 35 per cent for natural gas.

Germany has been under strong pressure from Ukraine and other nations in Europe to cut energy imports from Russia, worth billions of euros, which help to fill President Vladimir Putin’s war chest.

“All these steps that we are taking require an enormous joint effort from all actors, and they also mean costs that are felt by both the economy and consumers,” Mr Habeck said.

“But they are necessary if we no longer want to be blackmailed by Russia.”

The EU is considering an embargo on Russian oil after a decision to ban its coal, starting in August.

Germany has managed to shift to oil and coal imports from other countries in a relatively short time, meaning that “the end of dependence on Russian crude oil imports by late summer is realistic", the Economy and Climate Ministry said.

Weaning Germany off Russian natural gas is a far bigger challenge.

Before Russia invaded Ukraine on February 24, Germany obtained more than half of its natural gas from Russia.

That share is now down to 35 per cent, partly due to increased procurement from Norway and the Netherlands, the ministry said.

To further reduce Russian imports, Germany plans to quicken the construction of terminals for liquified natural gas, or LNG.

The ministry said Germany aimed to put several floating LNG terminals into operation as early as this year or next.

That is an ambitious timeline that the ministry acknowledged “requires an enormous commitment from everyone involved".

Germany watched with worry last week as Moscow immediately halted gas supplies to Poland and Bulgaria after they rejected Russian demands to pay for gas in roubles.

European officials called those moves by Russia “energy blackmail".

Germany’s central bank has said a total cut-off of Russian gas could mean 5 percentage points of lost economic output and higher inflation.