Berlin, Jun 24 (IANS): Germany's government has declared the second stage of the country's national gas emergency plan, after Russian gas supplies through the Nord Stream 1 pipeline were reduced to 40 per cent of capacity.

"The situation is serious," said Minister for Economic Affairs and Climate Action Robert Habeck, on Thursday describing the cutback in gas supplies as an "economic attack".

Although Germany's gas storage facilities have been filled to a greater extent than in the previous year, the desired storage level before winter is "hardly achievable without additional measures," Habeck added.

Germany announced the first stage, or the early warning level, of its three-stage emergency plan in late March, Xinhua news agency reported.

However, for the time being, the government is not yet making use of the so-called price adjustment mechanism.

"This mechanism may be necessary for certain situations to prevent a collapse of the energy supply. But it also has downsides, which is why we are working on alternative concepts," the German Minister said.

Driven by soaring energy prices, inflation in Germany hit 7.9 per cent in May, according to official figures. This was the highest level since the first oil crisis in the winter of 1973-1974.

According to Habeck, further price increases for gas are to be expected.

"This will affect industrial production and become a major burden for many consumers."

To cushion the effects of rising energy prices on consumers and companies, the German government has already adopted several measures.

These include an increase in the basic tax-free allowance, higher mileage allowances for long-distance commuters, a discount ticket for public transport, and a fuel tax cut.

"We are in a gas crisis," Habeck said.

"Gas is a scarce commodity from now on."