(Bloomberg) -- A German energy group said the country’s natural gas-supply situation is about to deteriorate and urged the government to issue the first level of warning in its emergency plan.

The BDEW, which represents Germany’s main gas and electricity suppliers, said it can’t rule out disruptions to supplies after Russian President Vladimir Putin demanded payment in rubles, according to a statement on its website. It called on Germany to issue an early warning, which would need to be coordinated at the European level, it said.

“There are concrete and serious indications that the gas supply situation is about to deteriorate,” said Kerstin Andreae, BDEW’s chairwoman. “With Putin’s announcement that future gas deliveries will have to be paid for in rubles, an impact on gas deliveries cannot be ruled out.”

Read More: Putin Demands Ruble Payment for Gas, Escalating Energy Fight 

The federal government should work with network operators and municipalities to prepare for how to handle a gas shortage, the group said. This includes setting up criteria for which industries and sectors would be supplied during such an event. German consumers are protected by existing regulations, according to the BDEW. 

Putin ordered Russia’s central bank to develop a mechanism to make ruble payments for natural gas within a week, during a meeting with his government on Wednesday. European benchmark gas prices surged more than 30% on an intraday basis following the news. 

The order essentially forces European companies to prop up the ruble after it was sent into free-fall due to international sanctions placed on Russia following its invasion of Ukraine.

Putin’s demand would most likely be a breach of long-term contracts for most German utilities, Economy Minister Robert Habeck said Wednesday, adding that the disputes and renegotiations that would follow could disrupt the smooth supply of gas across Europe. Germany will consult with its European partners before responding to the Russian demands, he said.  

(Updates with additional details from fourth paragraph.)

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