Page 11 - FSUOGM Week 14 2022

FSUOGM POLICY FSUOGM

Confusion reigns over Russia’s

rubles-for-gas policy

RUSSIA RUSSIAN President Vladimir Putin gave Euro- organised by the Moscow Interbank Currency
pean gas buyers a stern warning on March 31: Exchange (MICEX) – RTS and credits the pro-
Putin's words and his start paying for Russian gas in rubles from the ceeds in rubles to the K type ruble account for the
decree do not match. beginning of April, or supplies will be cut off. foreign buyer; it then transfers the proceeds, in
However, the decree he signed that was published rubles, to the ruble account opened by the Rus-
by the Kremlin on the very same day contradicts sian supplier in the authorised bank.”
this, stating that buyers may continue paying in There is also no indication from the Kremlin
foreign currencies as per their contracts. at this time that gas prices will be set in rubles. In
“To buy Russian gas, they need to open other words, despite Moscow’s rhetoric, arrange-
ruble accounts in Russian banks,” Putin said in ments for European buyers have not changed
a government announcement. “It is from those greatly. This also means that the terms of Russia’s
accounts that gas will be paid starting April 1. gas supply contracts, which stipulate payments
If such payments aren’t made, we will consider in specific currencies, have not been violated.
this a failure by the client to comply with its Putin’s first announcement on March
obligations.” 23 that Russia would demand payment in
However, the decree states that buyers merely rubles triggered a spike in gas prices, as it was
have to pay their foreign currencies into accounts assumed that the switch would happen in the
they have set up at Gazprombank, which will near future. However, a number of European
then be responsible for converting those bills countries that buy gas spoke out against the
into rubles. measure, warning it would violate contracts.
“Under the executive order, a foreign buyer German Chancellor Olaf Scholz then said on
transfers the foreign currency specified in a con- March 30 that he had received assurances from
tract on natural gas supplies to a special K type Putin in a phone call that Germany and other
currency account,” the decree stated. “Based on European buyers would be able to continue
the foreign buyer’s instruction, the authorised paying for their gas in euros. As Kremlin press
bank sells the foreign currency transferred by the secretary Dmitry Peskov later confirmed, the
foreign buyer to this account at a trade session process will take time. ™

Week 14 06•April•2022 www. NEWSBASE .com P11