Read Why President Putin Signs Decree Enforcing Roubles As Acceptable Currency For Gas

Vladimir Putin, the Russian President on Thursday signed a decree saying foreign buyers must pay in roubles for Russian gas from Friday, April 1.

 

 

This is even as he warned that contracts would be halted if the payments were not made in the preferred currency, Reuters reports.

Russian President Vladimir Putin
Putin said, “In order to purchase Russian natural gas, they must open rouble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow.

“If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped.”
Meanwhile, European nations have rejected the ultimatum and Berlin said it amounted to “blackmail.”

Russia supplies about a third of Europe’s gas, so energy is the most powerful lever at Putin’s disposal as he tries to hit back against sweeping Western sanctions over his invasion of Ukraine.

On February 24, Russian troops invaded Ukraine following a directive by President Vladimir Putin for what he described as a special military operation in the Donbas region.

France’s economy minister said France and Germany were preparing for a possible scenario that Russian gas flows could be halted – something that would plunge Europe into a full-blown energy crisis.

An order signed by Putin set out a mechanism for buyers to transfer foreign currency to a special account at a Russian bank, which would then send roubles back to the foreign buyer to make payment for the gas.

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He said the switch was meant to strengthen Russia’s sovereignty, and it would stick to its obligations on all contracts.



-BarristerNg

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