“Fraud under ruble dressing”: why did Russia not accept gas payments for Germany?

Germany double game

The money was sent to a ruble account by Gazprom Marketing & Trading, as requested by Russia, reported American edition of Bloomberg.

According to one of the sources, Gazprombank refused the company’s payment under a medium-term contract for the supply of 7 TWh of gas equivalent energy until the end of 2023. If GM&T is unable to negotiate gas supplies with Russia, this will lead to a reduction in supply to Europe. And the company will have to look for a replacement in another country – at a higher price.

In an interview with socialbites.ca, director of the National Energy Institute Sergey Pravosudov emphasized that Gazprombank’s decision not to accept ruble payments from GM&T was more than logical. The fact is that GM&T is part of the Gazprom Germania group, which Germany has effectively expropriated from the Russian monopoly.

“GM&T was founded 20 years ago to enable Gazprom to trade gas directly with European customers. These contacts meant preferential fuel delivery to final consumers.

A month ago, Germany “squeezed” the German “daughter” from the monopolist and took foreign control over her. Now Berlin wants Gazprom to continue with GM&T preferential deliveries as before. Germany continues its behind-the-scenes machinations under Ruble sauce,” says Pravosudov.

In his view, the situation with M&T is Berlin’s “double game” in the confrontation between Moscow and sanctions.

Aleksey Belogiev, Deputy Head of Energy at the Institute of Energy and Finance (IEF), partially agrees with him. According to him, Germany’s ruble payment for gas is not officially a violation of Russia’s requirements, but a violation of the ethical standards of fuel trade between Moscow and Berlin.

“Berlin actually used Gazprom’s German account to pay for Russian gas. From a legal standpoint, the nationalization of GM&T was highly questionable. Also, I don’t quite understand what GM&T has to do with long-term contracts, because until recently it specialized in short-term deals,” Belogoriev summed up.

Will the EU give up on Russian gas?

Gazprombank’s decision not to accept Germany’s ruble payment could hasten the EU’s withdrawal from Gazprom’s fuel, as Russia halts gas supplies to Poland and Bulgaria. However, Belogoriev emphasized that this process would become inevitable without the aggravation of trade relations between the monopolist and a number of European countries.

“If the governments of Germany and Italy do not put their word on the wheels of Uniper and Eni, these companies will open ruble accounts at Gazprombank. Poland and Bulgaria lost Russian gas due to their refusal to convert to mandatory currency. So we’re in the current situation. It is not surprising that Eastern European countries are returning to Moscow’s energy blackmail rhetoric,” says the expert.

Belogoriev believes that “Gazprom” will not lose its key buyers in the EU, but Russia will not be able to affect the reduction in the supply of raw materials to Europe. A “green” energy transition will accelerate this process.

Europeans will be able to do without Russian gas for the next three to four months, even without austerity measures. They have the necessary margin of safety for this. But this will disrupt the process of pumping gas into underground storage facilities, which will create risks for the uninterrupted transition of the autumn-winter period,” he said.

At the same time, he noted that the EU cannot do without Russian gas for at least a year in the next four to five years – a large amount of supply will have to be replaced. By the end of 2022, however, Russia’s gas transit to Europe may decline sharply.

The reduction in gas supply by December may be around 30 billion cubic meters compared to the end of 2021. According to the most optimistic forecasts, Russia’s fuel supply to the EU by this time could fall from 141 billion cubic meters to 108 billion.

Germany will also benefit from

The cessation of Russian gas supplies to Poland and Bulgaria will not mean a de facto suspension of gas flows from Moscow to Europe. Pravosudov emphasized that in the framework of his contacts with Gazprom, Bulgargaz company is only a transit country for fuel to other countries, and Poland PGNiG will now have to pump Russian fuel from Germany at a higher price.

“As part of the Russian gas payment in rubles, nothing changes for Austrian OMV and German Uniper – they will pay the same relatively low price in euros.

Polish PGNiG is a completely different story. The expert noted that Warsaw is currently repeating Ukraine’s path from Moscow to “gas independence”.

Already in April, Warsaw sharply increased the volume of reverse Russian gas supplies from Germany. In fact, this fuel is taken from a very real Nord Stream 1 pipe. Pravosudov said that in this way, Warsaw helps Berlin make good money and strengthens its status as Europe’s leading gas hub for Germany.