Russian President Vladimir Putin said on Thursday he signed a decree that mandates “unfriendly” foreign buyers must pay in rubles for Russian gas starting on April 1.
If payments aren’t made in Russia’s currency, contracts will be halted, the Russian president said. A number of European countries rely heavily on Russian gas and oil, meaning that a halt in gas exports could plunge those countries into a significant energy crisis.
“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.”
In the decree, according to state media, the new system of payment entails buyers having to open ruble accounts in Russian banks, which will allow them to pay for gas supplied starting from April 1.
“What has already happened? We supplied European consumers with our resources, in this case, gas,” he said, according to Ria Novosti. “They received it, paid us in euros, which they then froze themselves. In this regard, there is every reason to believe that we delivered part of the gas provided to Europe practically free of charge.”
But existing contracts will be kept, however, if customers follow the new rules, Putin also said Thursday.
The Group of Seven of advanced countries—the United States, France, Germany, United Kingdom, Canada, Italy, and Japan—has so far refused to meet Russia’s demand to pay for gas in rubles. Germany and Austria have already started making preparations to deal with a possible gas crisis, activating emergency plans to deal with any disruptions.
“What his ideas are for how this can happen is what we will now look at closely,” German Chancellor Olaf Scholz told reporters in Berlin after Putin’s announcement. “But in any case, what goes for companies is that they want to and will be able to pay in euros.”
Italian Prime Minister told reporters earlier Thursday that he received assurances from Putin that Europe won’t have to pay in rubles.
After a call with Putin on Wednesday evening, Draghi claimed that “existing contracts remain in force. … European companies will continue to pay in dollars and euros,” reported The Associated Press.
“We—Germany and Italy, along with other countries that are importers of gas, coal, grains, corn—are financing the war. There is no doubt,’’ Draghi also told reporters. “For this reason, Italy along with other countries, are pushing for a cap on the price of gas. There is no substantial reason that the price of gas is so high for Europeans.”