Putin takes a week to complete the adjustments to rubles. Until now, almost no gas has been billed in that currency. According to the Russian state-owned company Gazprom, nearly 60 percent of trade is in euros, just under 40 percent in dollars and a few percent in British pounds.
The question is whether Russia can unilaterally enforce the change to rubles. Germany says gas contracts must be broken if Russia wants to receive rubles from now on. Italy, after Germany the largest buyer, wants to continue to pay with euros. An exception is Bulgaria. The country’s energy minister says gas can be billed in rubles if necessary.
Eneco purchases 15 percent of its gas from Gazprom’s German subsidiary Wingas. “We expect the current contract with Wingas to be continued in euros. We have no reason to think that it will be any different.”
More expensive gas
About 40 percent of the gas used in Europe comes from Russia. If contracts have to be broken, this will lead to higher prices for consumers, thinks Elwin de Groot, economist at Rabobank.
“Breaking open contracts is a negotiating moment. That will probably lead to higher prices for a number of importers. That will also have consequences for the wallets of consumers.”
Gas prices have been rising since Putin’s announcement. In one day, 20 percent was added, after the price of gas had fallen slightly in recent weeks.
Political reason
De Groot thinks that Russia is not just putting the ruble requirement on the table to increase the exchange rate of the currency and gas prices. “Besides the economic one, there is a clear political reason behind it. He wants to force Europe to undermine, to undermine, its own sanctions.”
According to De Groot, this has to do with the fact that there are not enough rubles in circulation on the European market to be able to pay for all the gas. “Then European countries have to buy rubles from the central bank of Russia and that bank has been sanctioned by the EU. Then European countries have to circumvent their own sanctions. Putin is actually saying that the sanctions should be lifted.”
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