Gas prices could soar even higher as Putin blasts 'stupid' EU and threatens to turn off all energy supplies

Russian President Vladimir Putin delivers a speech during a plenary session at the Eastern Economic Forum in Vladivostok, Russia, Wednesday, Sept. 7, 2022. (Sergei Bobylev/TASS News Agency Host Pool Photo via AP)
Russian President Vladimir Putin has said price caps on Russian gas are "stupid". (AP)

Vladimir Putin has stoked fears that the cost of gas could increase even more if price caps are imposed on Russia's energy resources.

Speaking at an economic forum in Vladivostok, the Russian president branded Europe's calls for a price cap on his nation's gas as "stupid," and said Moscow would walk away from its supply contracts if the West follows through with its threat of caps.

EU energy ministers are meeting on Friday to discuss how to respond to reduced gas supplies from Russia and a surge in prices that threatens to overwhelm businesses and consumers as demand rises in the winter.

Read more: 'It would be a disaster' - Germany’s biggest gas company refuses to rule out energy rationing

FILE - Morning light lights the landfall facility of the Nord Stream 1 Baltic Sea pipeline and the transfer station of the OPAL gas pipeline, the Baltic Sea Pipeline Link, in Lubmin, Germany, on July 21, 2022. Europe is staring an energy crisis in the face. The cause: Russia throttling back supplies of natural gas. European officials say it's a pressure game over their support for Ukraine after Russia's invasion. (AP Photo/Markus Schreiber, File)
Morning light lights the landfall facility of the Nord Stream 1 Baltic Sea pipeline. (PA)

In a combative speech to an economic forum in Russia's Far East region, Putin threatened to halt all supplies if it took such a step.

"Will there be any political decisions that contradict the contracts? Yes, we just won't fulfil them. We will not supply anything at all if it contradicts our interests," Putin said.

"We will not supply gas, oil, coal, heating oil - we will not supply anything," Putin said.

Europe usually imports about 40% of its gas and 30% of its oil from Russia.

The potential plan to cap prices on Russian gas, one of the main measures being weighed by the EU, was thrown into doubt when a Czech minister said it should be taken off the agenda.

The Czechs are helping to guide discussions as holders of the EU's rotating presidency.

"It is not a constructive proposal, according to me. It is more another way to sanction Russia than an actual solution to the energy crisis in Europe," Industry Minister Jozef Sikela has said.

Eurelectric, a body representing the European electricity industry, has also criticised plans for an EU cap of 200 euros per megawatt hour on the price of electricity from generators that do not run on gas.

Kristian Ruby, Secretary General of Eurelectric, said: “The root cause of the problem is a shortage of gas supply and our addiction to imported fossil fuels. Governments should seek to tackle this rather than resorting to distortive, ad-hoc interventions in the electricity marke."

The energy crisis facing Europe has worsened since Russia's Gazprom stopped pumping gas via Nord Stream 1, a major supply route to the continent.

Putin has blamed European nations for the pipeline not being operational.

Ukrainian firefighters work on heavily damaged buildings after latest Russian rocket attack in center Kharkiv, Ukraine, Tuesday, Sept. 6, 2022. (AP Photo/Andrii Marienko)
Gas prices have been on the rise since Putin ordered the invasion of Ukraine. (AP)

The EU had already agreed to cut its use of Russian gas by 15% over the winter.

Putin rejected Western claims that Moscow was using gas as a weapon to break opposition to its invasion of Ukraine.

Kremlin spokesman Dmitry Peskov blamed the "collective West" for Russia's decision to shut off the important pipeline on Monday

He told the Interfax news agency on Monday: "The problems pumping gas came about because of the sanctions western countries introduced against our country and several companies.

"There are no other reasons that could have caused this pumping problem."

Peskov added that the reinstatement of gas supplies via Nord Stream 1 would “undoubtedly” be dependent on the west lifting its sanctions on Moscow.