Putin okays payments for Russian gas in currencies other than ruble

31 December 2022, 03:50 PM
Putin signed a decree allowing him to accept gas debts from

Putin signed a decree allowing him to accept gas debts from "unfriendly" countries in currency, not rubles (Photo:Sputnik / Mikhail Metzel / Pool via REUTERS)

Russia has allowed gas exporters to accept payment of debts from buyers from "unfriendly" states in foreign currency, according to a decree signed by Russian President Vladimir Putin on Dec. 30, Kremlin media reported.

The document amends another decree, which Putin signed in late March, stipulating that purchases of Russian gas by "unfriendly" countries have to be made exclusively for rubles.

Now payments for gas are to be credited to a special account of the Russian supplier opened in foreign currency.

At the same time, the repayment of debts for gas will not be considered a reason for the resumption of supplies if there is non-compliance by a foreign buyer with the procedure introduced in March — that is, payment for gas in rubles.

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Putin's blackmail. What is known about requirement to pay for Russian gas in rubles

After the beginning of Russia's full-scale war against Ukraine, Russian dictator Vladimir Putin intensified his gas war against the European Union. On March 23, he ordered payments for gas supplies made to "unfriendly countries" to be made only rubles. With his decree, Putin obliged companies from such countries, primarily European ones, to open two accounts in Gazprombank — one in euros and one in rubles — and warned that payments for gas would not be credited until the euros were converted into rubles.

EU leaders initially rejected Putin's demand to pay for Russian gas in rubles. In addition, the G7 countries agreed to reject Moscow's demand to pay for its energy imports in rubles.

On March 31, Putin said that if payments were not made in rubles, gas exports will be stopped. The EU stated that it "will not give in to Russia's blackmail," and head of the European Commission Ursula von der Leyen noted that payment for Russian gas in rubles would constitute an evasion of sanctions.

However, Putin's demands to pay for gas in rubles divided the EU member states. Some countries allowed importers to pay under the new scheme, while others refused.

For those states who outright refused and whose payment deadline came, Putin cut off the gas. In particular, the supply was stopped to operators from Poland, Bulgaria, Finland, and the Netherlands.

Finally, the EU leaders agreed on a plan to buy Russian gas, which will avoid the violation of sanctions and at the same time satisfy Putin's demand for payment in rubles.

Nevertheless, gas supplies from Russia to the EU have since plummeted. Besides, the EU is currently discussing limiting the price of Russian gas.

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