The European Commission presented an analysis of Russian President Vladimir Putin’s decree on payments in rubles for natural gas and warned EU member states that the implementation of Moscow’s requirements would violate the sanctions imposed after the start of the military operation in Ukraine, the agency reported. . Bloomberg.
“Putin’s decree significantly changes the procedure and creates a new legal situation. This mechanism will violate the restrictive measures taken by the European Union against the Russian government Central Bank,” he said.
The EC believes that the new payment procedure “transfers full control to the Russian state” over when the gas purchase will be completed and at what point the buyer will be freed from obligations.
In addition, gas payments in rubles will give Moscow the opportunity to: organize the change course in their own interestsAccording to the European Commission.
On March 31, Putin signed a decree on the transfer of gas payments to rubles with “non-enemy” countries. According to the document, buyers of Russian gas are required to open ruble and foreign currency accounts at Gazprombank to pay for supplies from April 1. Gas payment will be made by transferring euros or dollars to the foreign currency account. The bank will then be able to sell this currency in Moscow. Exchange and deposit the received rubles into the gas buyer’s ruble account. Gas will be considered paid when funds from the sale of foreign currency are deposited into the supplier’s ruble account opened in the same bank.
EU leaders have repeatedly stated that they are against paying for Russian gas in rubles. In particular, European Commission President Ursula von der Leyen described Putin’s decision as an attempt to circumvent EU sanctions and talked about the risks posed by the new payment plan for European companies. In response, the Kremlin said Russia “does not intend to participate in charity” and will not supply gas if payment is not made.
Who is ready to pay in rubles?
So far, there is no unity in the European Union on both the transition to a new payment plan and the ban on gas supply from Russia. Many countries have stated that they will not change the payment currency, but there are those who are ready to pay for gas in rubles, in line with Russia’s requirements. Ultimately, the decision on how supplies will be paid will be made by companies purchasing Russian gas.
Among EU countries, only Hungary expresses its open willingness to pay for gas in rubles. Foreign Minister Peter Szijjarto believes that introducing a new reconciliation procedure would not be a violation of EU sanctions. At the same time, the Hungarian government opposes the embargo on the supply of Russian oil and gas, as they play such an important role in the country’s economy.
Hungarian Prime Minister Viktor Orban emphasized that 85 percent of the gas consumed in Hungary comes from Russia, 85 percent of Hungarian households use gas, the country’s fuel is also produced from oil, and 64 percent of this is met by Russia.
Slovakia, which buys 85-87% of the natural gas used in the country from Russia, also announced that Russia must fulfill the requirement to pay the supply in rubles. At the same time, Slovak Deputy Prime Minister Richard Sulik condemned Moscow’s request to pay for natural gas imports in rubles, calling it a violation of existing agreements.
On April 2, Lithuania announced that it had completely abandoned Russian natural gas supplies. Latvian authorities have said that refusing to import Russian gas could cause an energy crisis in the country.
On April 12, Russian Energy Minister Nikolai Shulginov said in an interview: “Izvestia”that constructive minded countries are exploring the possibility of payment in rubles. According to the minister, this form of payment does not increase the costs of buyers.
“It should be borne in mind that other players today cannot replace Russian gas either in terms of volumes or the availability of suitable infrastructure,” Shulginov said.
He also said that Russia is negotiating with companies and countries considering the possibility of payment in rubles.
Who will supply energy resources instead of Russia?
Colombian President Ivan Duque said the country is ready to replace Russian energy supplies in the EU and can play a central role in providing energy supplies to Western countries.
The president outlined three areas where Colombia would be ready to increase production: conventional oil and gas production, renewable energy sources such as clean hydrogen, and coal.
“Colombia can increase coal production today. <…> We have some of the largest resources in the world and we don’t use them,” said Duque.
After meeting with German Chancellor Olaf Scholz, he also said Colombia would increase coal supplies to Germany.
Within the framework of the fifth sanction bloc, the European Union agreed on a full embargo on coal supplies from Russia. Restrictions on other energy carriers are not included in this sanctions package. On April 11, the head of EU diplomacy, Josep Borrell, said that discussions on the embargo on Russian gas and oil are continuing.
Despite the sanctions imposed by some states, Russia’s revenue from oil and gas sales could be a record. According to Bloomberg, in 2022 Moscow could receive almost $321 billionunless importers impose an appropriate embargo. That’s a third more than in 2021.