Russia Ukraine conflict

Putin says Russian gas must be paid for in rubles from Friday

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Russian President Vladimir Putin said on Thursday that he had signed a decree saying foreign buyers must pay in rubles for Russian gas from April 1, and contracts would be halted if these payments were not made.

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

“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.”

According to the decree, foreign buyers of Russian gas would have to use special accounts at Gazprombank to pay for the import of Russian gas.

A foreign buyer is now obliged to transfer foreign currency to one special, so called “K,” account. Gazprombank would then buy rubles on behalf of the gas buyer to transfer rubles to another special “K” account, the order said.

Gazprombank would then transfer ruble funds from a “K” type account of the foreign gas buyer to Gazprom’s ruble accounts, the order said. Gazprombank can open such accounts without a presence of a foreign buyer’s representative.

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Putin’s decision to enforce ruble payments for gas has boosted the Russian currency, which fell to historic lows when the West applied sweeping sanctions after he sent his army into Ukraine on February 24.

But Western companies and governments have rejected the move as a breach of existing contracts, which are set in euros or dollars.

Putin said the switch was meant to strengthen Russia’s sovereignty, and it would stick to its obligations on all contracts. Russia supplies about a third of Europe’s gas.

He also said that western nations will try to find new grounds to sanction Russia, adding that his country must aim to retain jobs and to create new ones.

Putin added in the televised remarks that the US was profiting from the global turbulence.

Read more:

Russia’s gas supply to Europe at risk as ruble deadline nears

Turkey faces risks acting as sanctions ‘safe haven’ for Russians

Poland refuses to pay for Russian gas in rubles

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