Jakarta, CNBC Indonesia – Russian President Vladimir Putin’s latest “bomb” against the west is officially completed. Rules for using the ruble for Russian gas transactions come into force today, Friday (1/4/2022).
Thursday, Putin signed a decree requiring foreign buyers to pay in rubles by April 1. The contract will be terminated if payment is not made.
“To buy Russian natural gas, they have to open a ruble account in a Russian bank. It is from this account that payments will be made for gas deliveries from tomorrow,” Putin said in televised remarks.
“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 work, meaning existing contracts will cease.”
Putin’s decision to impose ruble payments for gas has sent Russia’s currency depreciating. Earlier the ruble fell to an historical low when the West imposed sweeping sanctions after the 69-year-old sent troops to Ukraine, February 24.
Putin said the switch was meant to strengthen Russia’s sovereignty. The country of the Red Bear itself supplies about a third of Europe’s gas, which is essential for the fulfillment of energy, including electricity, for the Blue Continent.
Meanwhile France, Germany and England reacted. French Economy Minister Bruno Le Maire and German Economy Minister Robert Habeck said Russia was in breach of contract.
“The contract is in euros and must be paid in euros and will be paid in euros,” Le Maire said alongside Hobeck.
“We will not accept payment methods for (Russian) gas in any currency other than those stated in the contract.”
England also said they did not accept it. UK Energy Minister Kwasi Kwarteng has explained that “this is not something the UK is looking for”.
According to the European Union Statistics Agency, Eurostat, about 43% of the natural gas consumed annually in the European Union (EU) is purchased from Russia. The rest are imported from Norway, the Middle East, the United States (US) and North Africa.
Within the EU itself, Russia’s gas share differs in each country. However, in general, the farther a country is located, the more it depends on Russian gas.
Germany consumes the most energy in Europe. Every year Panzer Country imports 55% of natural gas from Russia.
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