European Union will not pay in rubles for Russian gas, prepares for supply cuts – News

The European Union (EU) will not pay in rubles for its gas purchases from Russia and is preparing for supply cuts, a source close to the European Commission said on Monday (2) at the end of a meeting of ministers in Brussels.

European Energy Commissioner Kadri Simson said the Russian requirement to receive payments in rubles is a “unilateral and unjustified modification of contracts, so it is legitimate to refuse it”.

According to Simson, approximately 97% of contracts signed by European companies for the purchase of Russian gas specify the euro and the US dollar as payment currencies.

Simson said the payments due in mid-May will be made “in line with the contracts”.

“We must prepare for a suspension of supply,” said Simson.

The meeting is the first in the industry since Moscow cut off supplies to Poland and Bulgaria, which refused to pay rubles for their liquefied gas imports.

At the end of the meeting, the European Commission communicated to the countries of the bloc its conviction that the payment of Russian gas purchases in rubles represents a breach of the sanctions adopted by the EU against Russia.

However, he said that, at the request of the ministers themselves, the commission “will provide a more detailed guide to what companies can or cannot do under the sanctions”.

The issue has become a huge headache for the EU: nearly 40% of the liquefied gas used by European industry comes from Russia.

The possibility that Russia will cut off gas supplies to countries that refuse to pay in rubles raises warning signs, and to avoid this scenario it is necessary to clarify what the alternatives would be.

“We ask for a clear explanation on how to proceed,” said the Minister of Industry and Commerce of the Czech Republic, Josef Síkela, at the end of the meeting.

“Too complex” process

Khashayar Farmanbar, Sweden’s minister, noted that “clarification is progressing, but the process is very complex.”

“Paying in a currency is one thing, but if the operation involves the central bank of another country, it becomes a different business and it will be delicate to manage it. [Europeia] is making its best efforts to clarify the matter,” he said.

Polish Minister of Climate Action and Environment Anna Moskwa said the European Commission “confirmed that paying in rubles is unacceptable”.

Representatives from the Baltic countries (Estonia, Lithuania and Latvia) and from Denmark, the Netherlands and Finland assured that they will not pay for their Russian gas purchases in rubles.

Arriving at the meeting, Moskwa lamented Russia’s decision to cut off gas supplies to Poland and Bulgaria.

“We call for an immediate embargo on Russian oil and gas. The time has come for oil, soon it will be for gas,” he said.

Due to the sanctions adopted by the EU, the Russian hydrocarbon company Gazprom started to demand that payments be made in Russian currency, in a procedure that involves the country’s central bank, circumventing the sanctions.

The ministers also discussed the gradual cessation of purchases of Russian oil and derivatives, but no decision was adopted on the subject at that meeting.

“A new package of sanctions is in preparation,” said French Minister for Ecological Transition Barbar Pompili.

And in Panama, where he is on an official visit, the head of European diplomacy, Josep Borrell, warned that “more Russian banks will leave the [sistema] Swift”, a crucial platform for international transactions.

Several European diplomatic sources indicated over the weekend that one of the affected banks will be Sberbank, which accounts for 37% of the Russian market.

About Abhishek Pratap

Food maven. Unapologetic travel fanatic. MCU's fan. Infuriatingly humble creator. Award-winning pop culture ninja.

Check Also

Cats know each other’s names and the names of people they live with

In recent years, scientists have been proving that cats really do connect deeply with humans, …