February 2, 2023
Putin will suspend gas contracts if countries do not pay in rubles

Putin will suspend gas contracts if countries do not pay in rubles

Russian President Vladimir Putin said on Thursday he would suspend gas supply contracts if “unfriendly” countries did not pay for fuel in rubles and open an account in Russian currency with Gazprombank.

“Today I signed a decree defining the rules for trading Russian natural gas with so-called unfriendly countries,” the Russian leader announced shortly before a meeting with the aviation industry, which will enter into force on April 1.

“We offer these countries a clear and transparent mechanism: to purchase natural gas from Russia, they must open accounts in rubles with Russian banks. Payments for gas provided by these accounts will be made as of tomorrow,” Putin said.

In the decree, the Russian president specified that the bank authorized to carry out the measure is Gazprombank, which is one of the few financial institutions in Russia that has not been sanctioned by the European Union (EU) because it, along with Sberbank, handles a large part of the energy transactions with the bloc.

The president stressed that Russia will not do “charity” when it comes to supplying gas to Europe and other countries.

“If these payments are not made, we will consider this a violation by the buyers with all the ensuing consequences. Nobody sells us anything for free and we will not do charity work either. This means that the existing contracts (in the case of non-payment of gas in rubles) “.

Putin noted that Russia provided “European consumers with resources, in this case gas, which they obtained and paid for in euros, which they themselves later froze.”

He felt that “in this sense, there is reason to believe that we are providing a part of the gas to Europe practically free”, saying that this cannot continue.

However, the decree gives the Foreign Investment Control Authority the power to grant “permission to foreign buyers to fulfill their obligations to Russian suppliers of natural gas supplies without having to comply with established procedures” on payment in rubles.

On March 8, the Russian government adopted a list of unfriendly countries and territories, including the United States, Canada, all members of the European Union, the United Kingdom, Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco and Norway. San Marino, North Macedonia, Japan, South Korea, Australia, Micronesia, New Zealand, Singapore, and Taiwan.