• Germany must cut its gas usage by 20% to avoid a shortage this winter.
• "There is a serious risk that we will not have enough gas," it's top regulator told the FT.
• Europe is facing an energy crisis that could worsen this winter if Russia totally cuts off gas supply.

Germany must slash its gas usage by 20% to avoid a grueling energy shortage this winter, its top network regulator told the Financial Times.

"If we fail to reach our target [of 20% gas savings] then there is a serious risk that we will not have enough gas," said Klaus Müller, head of the federal network agency who will be in charge of rationing gas supplies if Germany suffers an energy crunch in the coming months.

Müller told the FT that Germany requires about 10 gigawatts of extra gas from other sources - mainly liquefied natural gas from countries like the US - to replace the missing volumes from Russia.

Germany might also need to reply on gas imports from other European countries as a result of squeezed supply. The long-term cost of ending Germany's dependence on Russia would be a "very high gas price," Müller continued.

Europe is embroiled in an power crisis as Russia chokes off supply to the region in retaliation for Western sanctions, in which industry leaders say Moscow is "weaponizing" its energy.

It's exacerbated the risk of Germany entering a recession and forced it to ration supplies in the event that Russia completely cuts off the flow of gas to the country. Some large cities in Germany for example are limiting heating and turning off spotlights to save on natural gas.

Meanwhile, the International Monetary Fund said Germany is on track to meet its target of cutting consumption by 15% between August this year and March 2023.

Müller however refrained from optimisim, saying that even if all gas tanks were filled, Germany would only have enough gas for about two and a half months if Russia cuts supply altogether.

"We need enough for at least two winters, not just one," he said, adding that "it's not a good option to empty gas storage at the expense of next year."

 Business Insider