Central Europe faces harsh winter after gas pipeline shutdown

Businesses across Central Europe are grappling with rising energy costs after Ukraine halted the flow of Russian natural gas through a key pipeline. The shutdown, effective January 1, marked a significant shift in Europe's energy landscape.

"It's the end of an era," said Tomas Dudas, dean of the Faculty of Economics and Business at Pan-European University. "No natural gas is flowing from or through Ukraine, so after many decades, it's a new situation."

Ukraine's decision came after signaling it would not renew its pipeline agreement with Russia, which expired at the end of 2024. The move is part of Kyiv's strategy to weaken Moscow financially amid the countries' ongoing conflict. However, the impact on Europe has been significant.

In Slovakia, small business owners like Tereza, who runs a yoga studio in Bratislava, are bearing the brunt of the energy crisis. Her monthly gas bill has surged to $1,000.

"In our case, the owner of the building gave us a bit of the discount to substitute for the gas, but that ended," she said.

Tereza has cut back on heating and lighting to save costs, but she remains worried about the future. Many small businesses across Central Europe are in similar positions, struggling to survive as energy prices continue to climb.

Winter stretch

Slovakia's government insists that the country's gas storage levels are sufficient for now. However, experts warn that a harsh winter could stretch supplies and push prices even higher.

Russia once supplied 40 percent of Europe's natural gas. By 2023, that share had fallen to 8 percent, as the European Union worked to reduce its reliance on Russian energy. The pipeline shutdown has compounded challenges for countries already adapting to a reduced supply.

Slovakia, which also earned significant transit fees from the pipeline, now faces a dual financial blow.

"Slovakia was not only the consumer of Russian gas but also an important transition country," said Ambassador Miroslav Wlachovsky, a former Slovak foreign minister. "The question is not whether gas can be transported to Slovakia, but the price."

The loss of transit fees is projected to cost Slovakia $513 million annually. The country will also need to pay $184 million for alternative routes, such as importing natural gas from Azerbaijan and liquefied natural gas from the U.S. via Poland.

Prime Minister Robert Fico has acknowledged the financial strain, but experts say much of the additional costs will trickle down to consumers.

For small business owners like Tereza, the future remains uncertain as they brace for another potential hike in energy costs.