Gas prices rose in Europe, share prices and the euro fell after Russia cut off gas supplies via Nord Stream 1, Reuters reports.

EU governments are rushing billions of dollars in aid packages to prevent liquidity-driven collapse of energy companies and protect households from skyrocketing bills after Gazprom said it would stop pumping gas through the Nord Stream 1 gas pipeline due to for faults.

Many European electricity distributors have already gone bankrupt, and some big producers could be in danger from consumer price increases or rate hedging as gas prices are now 400% higher than a year ago.

Finland intends to provide 10 billion euros and Sweden 250 billion SEK in liquidity guarantees to their energy companies. Germany, more dependent on Russian gas than most EU countries, has offered multibillion-dollar bailouts to energy company Uniper.

Utilities often sell electricity up front to secure a certain price, but must maintain a "minimum margin" of a default deposit before they deliver electricity. The required margin deposit has risen sharply due to rising electricity prices, leaving companies struggling to find cash to cover the required margin.

The underlying gas price rose 35% on Monday and more than 400% year-on-year after Russia said on Friday that a leak in Nord Stream 1 equipment meant it would remain closed after a three-day maintenance break. last week.

European financial markets were shaken by the news. The euro fell to a 20-year low.

Several EU states have launched contingency plans that could lead to energy rationing and stoking fears of a recession, with inflation and interest rates soaring.

Some energy-intensive industries in Europe, such as fertilizer and aluminum producers, have already cut production. Other industries face huge fuel bills.

EU energy ministers are due to meet on September 9 to discuss options to curb the surge in energy prices, including gas price caps and emergency credit lines for energy market participants, according to a document seen by Reuters.

German Chancellor Olaf Scholz said on Sunday that Germany, the economic powerhouse of the EU, is preparing for a complete shutdown of gas supplies. Germany is in the second phase of a three-phase emergency gas plan. At the third stage there will be some rationing of the industry.

In the race for alternative supplies, Germany is installing temporary liquefied natural gas (LNG) terminals as a temporary measure while it builds permanent facilities to be able to bring gas from far away.

Norway, a major European producer, is pumping more gas into European markets but cannot fill the gap left by Russia.

Klaus Müller, president of Germany's Federal Grid Energy Regulatory Agency, said in August that even if Germany's gas storage facilities were 100% full, they would be empty in 2.5 months if Russian gas flows were completely stopped.

Vaults in Germany are currently around 85% full, while vaults across Europe reached their 80% target last week.