War idles some European mills as energy costs soar

War idles some European mills as energy costs soar

War idles some European mills as energy costs soar

Italian paper mills that make everything from pizza boxes to furniture packaging ground to a halt as Russia’s war in Ukraine has sent natural gas prices skyrocketing.

Italian steel mills, likewise, turned off electric furnaces last week. And fishermen, facing huge spikes in oil prices, stayed in port, mending nets instead of casting them, according to the Associated Press.

Nowhere more than in Italy, the European Union’s third-largest economy, is dependence on Russian energy taking a higher toll on industry. Some 40 percent of electricity is generated from natural gas that largely comes from Russia, compared with roughly one-quarter in Germany, another major importer and the continent’s largest economy.

Over the past decade, Italy’s dependence on Russian natural gas has surged from 27 percent to 43 percent - a fact lamented by Premier Mario Draghi. It will take at least two years to replace, his energy transition minister says.

Even before the war, Europe was facing a serious energy crunch that drove up costs for electricity, food, supplies and everything in between for people and businesses. Ever higher prices tied to fears that the conflict will lead to an energy cutoff are hitting the continent much harder than the U.S. because it imports so much of its oil and gas from Russia.

European leaders meeting on March 11 in Versailles outside Paris discussed ways of easing the pain. Draghi pushed to diversify gas sources, develop renewables and introduce a cap on natural gas prices. He said his foreign minister, who recently visited Algeria and Qatar, was working on new gas markets.

France announces fuel aid package

The French government has announced a package worth 2 billion euros ($2.2 billion) to help consumers struggling with soaring fuel prices, with the cost of filling up set to be cut at the pump.

French Prime Minister Jean Castex announced late on March 12 that petrol and diesel prices would be reduced by 15 centimes per liter.

“That means every time you fill up for 60 euros, you save around 9 euros,” Castex said.

Underlying petrol and diesel costs are linked to global oil markets which have risen by around 30 percent since the start of the year due to strong global demand and Russia’s invasion of Ukraine.