Late last month, Russian President Vladimir Putin warned if gas buyers from “unfriendly” states refuse to pay for fuel in rubles, Moscow would consider it a breach of contract.
Kremlin spokesman Dmitry Peskov has said that a ruble payment scheme that Russia currently uses with gas would be extended to new groups of goods in the future.
In an interview with the broadcaster Rossiya 1, Peskov said that Russia’s European counterparts will pay for gas in the same currency that is indicated in their contracts, but that the final payment will go to the Russian energy giant Gazprom in rubles.
“Thus far, this has been a prototype of the system. But I have no doubt that in the future it will be extended to new groups of goods. And it will occupy more and more space in our foreign trade relations”, Peskov stated.
The Kremlin spokesman added that Europeans will need to open ruble accounts and that this “will be done”.
“Russia values its reputation as a reliable supplier. Of course, we will not do anything that will undermine this reputation. Therefore, everything will be fast, clear, [and] understandable. But this must be done. These are the new rules, [and] they must be followed. I reiterate that for European companies, nothing de facto will change. De jure, it will be a different system”, he said.
Referring to the anti-Russian sanctions, Peskov explained that President Vladimir Putin’s recent decision on ruble payments for gas supplied to “unfriendly” countries was made so that Russia would not be deprived of the dollars and euros that were earlier paid for the fuel.
“What has happened? We see a frenzy of sanctions – the largest sanction burden in history now falls on Russia. Besides, as you know, our foreign exchange reserves, which were in other countries, were arrested”, the Kremlin spokesman said.
Putin Warns Against Refusing to Pay for Gas in Rubles
Due to the sanctions, Russian assets are currently blocked abroad, something that is also related to payments for gas.
On 31 March, President Putin warned buyers from “unfriendly states” against refusing to pay for gas in rubles.
“If such [ruble] payments are not made, we will consider this to be the buyers’ failure to perform commitments with all the ensuing implications”, Putin said. Earlier that day, he signed a decree stipulating acceptance of payments for gas in rubles.
The decision on such payments was announced by the Russian president on 23 March, when he stressed that “it is absolutely clear that delivering our goods to the EU, the US, and receiving payment in dollars, euros, and a number of other currencies does not make any sense for us”.
Putin recalled that by freezing Russian assets, the US and Western countries declared a default on Russia and drew a line under the reliability of their currencies.
The US and its allies slapped packages of “severe” sanctions on Russia after it launched a special military operation in Ukraine on 24 February to demilitarise and de-Nazify the country.