Pay in Rubles, or We Cut Your Gas Supply!

MOSCOW – Russian President Vladimir Putin demanding foreign buyers pay for gas Russia denominated in Ruble from Friday (1/4/2022) or their supply is cut. This policy was rejected by the capital Europe and according to Berlin tantamount to “blackmail”.

Putin said buyers of Russian gas “must open a ruble account in a Russian bank. It is from this account that payments will be made for gas deliveries from April 1.

Read: Buy Russian gas must use rubles, Germany and Austria prepare for emergencies

“If the payment is not made, we will consider this a default on the part of the buyer, with all the ensuing consequences. Nobody is selling us anything for free, and neither will we be doing charity – that is, existing contracts will be terminated,” he said in televised remarks, as quoted by Reuters.

It was not immediately clear whether in practice there might be a way for foreign companies to resume payments without using the ruble, which has been ruled out by the European Union and the G7 group of countries.

Under the mechanism laid down by Putin, foreign buyers will use a special account at Gazprombank to pay for gas. Gazprombank will buy the rubles on behalf of the gas buyer and transfer the rubles to another account, the order said.

Read: Putin: Russian gas payments in rubles start later this month

A source told Reuters that payments for gas delivered in April on some contracts started in the second half of April and May for others, suggesting that the taps may not be turned off soon.

Putin’s decision to impose ruble payments has pushed the Russian currency, which fell to historic lows after the February 24 invasion, back up.

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