Germany needs an early warning system amid signs of an imminent deterioration in gas imports, utility association BDEW said, a day after Russia announced it would seek ruble payments for gas sales to unfriendly countries, Reuters reported.

There are concrete and serious signs that the gas supply situation is about to deteriorate, BDEW said, citing Russia's demand.

BDEW said the national energy regulator, the Bundesnetzagentur, needs to set criteria under which industries and sectors will continue to receive supplies while residential consumers are protected under existing regulations.

Half of Germany's 41.5 million households are heated by natural gas, and industry accounts for a third of the 100 billion cubic meters of national demand in 2021. The country is the largest consumer of Russian gas.

BDEW represents 1900 gas, electricity and water operators.

Across Europe, the energy sector is already experiencing supply issues and soaring gas and electricity prices.

German Economy Minister Robert Habeck said on Wednesday that Moscow's demand for payment in rubles was a "violation" of supply contracts. He also said he would discuss the response with European partners.

The Russian gas exporter Gazprom has more than 40 long-term gas agreements with European counterparties.

Danish energy giant Orsted, which has a long-term take-or-pay deal with Gazprom, said it was not clear what the likely impact would be. A number of utilities have expressed similar views, saying they are reviewing their contracts and consulting.