What is Putin’s order on countries paying for Russian gas?
How have European countries reacted to Putin’s order to pay for Russian gas in rubles?
What has been the reaction of the G7 to the payment of Russian gas for the ruble?
What effect has the Russian president’s order to pay the price of gas by unfriendly countries on the ruble since April 1 affected the price of gas?
Three European countries, UK, France and Germany, have stated opposition to paying for gas imported from Russia using the national currency ruble. Many countries have stated that they are opposed to the payment of gas prices in rubles and will not do so.
France opposes Putin’s order
The German and French economy ministers have announced that they are committed to existing agreements with Russia to pay for Russian gas only in euros. “We are convinced that contracts are contracts. The contracts are based on euro and so we will continue to pay for energy imports in euro,” French economy minister Bruno Le Maire told a joint news conference with his German counterpart Robert Habeck. Habeck told a separate news conference that Germany was ready for all possibilities, including a halt to Russian gas supplies to Europe. Le Maire, meanwhile, said France was preparing for a possible gas cut by Russia.
Cut off Germany’s dependence on Russian gas
German Chancellor Olaf Scholz also stressed on Thursday that Berlin would pay for Russian gas only in euros. German Chancellor Olaf Scholz also told a news conference on Thursday that the country might end its dependence on Russian energy, including coal and oil, this year. He also stressed that cutting Germany’s dependence on Russian gas would take longer. Olaf Scholz’s office said Russian President Vladimir Putin told the German Chancellor that European companies could continue paying in euros or dollars. In a phone call with Scholz, Putin said the money would be paid into Gazprom Bank and then transferred in rubles to Russia, a German statement said. The bank is not currently subject to sanctions. “Scholz did not agree to this procedure in the conversation, but asked for written information to better understand the procedure,” the statement added.
UK does not accept Putin’s request
A spokesman for UK Prime Minister Boris Johnson said UK would not accept Russian President Vladimir Putin’s request to pay for Russian gas in rubles. The spokesman said British Energy Secretary Kwasi Kwarteng had explicitly stated that “this is not something that the UK would be looking into.” He added that London was in contact with British companies who might be concerned about the issue or its impact on industries and manufacturers across Europe. Johnson’s spokesman told reporters that British Energy Secretary Kwasi Kwarteng, in coordination with his counterparts in other countries, had explicitly stated that they would not pay for Russian gas in rubles.
UK’s less dependent on Russian gas
Unlike other European countries, UK is less dependent on Russian gas. Russia supplies only about 5% of British gas imports. However, rising energy prices have also affected the country’s economy. According to the Office for National Statistics (ONS), 51% of Britons now spend less on non-essential goods due to rising energy costs. 34% save on gas and electricity consumption at home, while 31% spend less on food and essentials.
Putin’s order on unfriendly countries
Russian President Vladimir Putin has stressed that countries on the list of “unfriendly” countries must pay for gas in rubles from the beginning of April. In a meeting with aviation industry officials, Putin also stressed that Moscow would meet its obligations to gas customers based on the prices and volumes set out in the contracts. He stressed: “If these payments are not made, we will consider it a failure of the buyer to fulfill its obligations with all the ensuing consequences.” On March 23, Putin announced that Russia’s embargoed countries would have to pay for gas in rubles, giving the government, the central bank and Gazprom one week to convert gas sales contracts into rubles.
G7 reacts to Putin’s request
Russia’s move prompted the Group of Seven (G7) to react, declaring that they would not pay for the gas purchased from Russia in rubles. However, Germany, one of Russia’s largest gas customers, has called for transparency in how the ruble is traded. Putin has signed an order requiring unfriendly countries to open accounts in Russian banks, and from April 1, payments must be made through these accounts in rubles.
Moscow’s helplessness in the face of sanctions
A US State Department spokesman claimed that Russia’s demand for rubles in exchange for gas from the country showed Moscow’s economic and financial “desperation”. State Department spokesman Ned Price claimed that Russia’s request showed Moscow’s helplessness.
The Russian president’s order to pay the price of unfriendly gas to the ruble from April 1 increased the price of gas for futures trading in Europe to $1,450. Gas prices for European futures traded at $1,450 per 1,000 cubic meters, according to data from the London’s ICE. As a result, futures for April on the European hub index TTF reached $1,448 per barrel. The order has heightened tensions between Russia and European countries.
