Russia told unfriendlily foreign nations they must begin paying for gas supply in rubles or it will cut supplies. Vladimir Putin, the Russian President, signed a ruling stating purchasers must open accounts in Russian currency in Russian banks from Friday. Putin said that nobody sells them anything for free, and they are not going to do charity either – that is, previous pacts will be stopped.
Western countries hit the Russian economy with severe sanctions, and Putin’s demand was seen as an effort to boost the ruble. His announcement means foreign customers of Russian gas would have to open a bank account at Gazprombank of Russia and transfer U.S. dollars or euros into it. Afterward, the bank would convert this into Russian currency, which will be used for gas payments.
Russia reiterated its threat to stop supplying natural gas to Western nations that refuse to pay in Russian currency, rubles. Russian threat raised new concerns about an energy supply crisis and restrictive allocation of scarce gas resources in Europe. pic.twitter.com/ra7ua4Ny2t
— Live News Now (@LiveNewsNow6) April 1, 2022
Last week, Russia said it sought to be paid in Russian currency, rubles rather than euros or Russian dollars. Furthermore, senior lawmakers of Russia said they would cut supplies if buyers refused to pay in rubles. Germany, the largest energy customer of Russia in Europe, called the announcement a blackmail plan and a breach of the previously signed deal.
During a joint news conference with German counterpart Robert Habeck, the French finance minister Bruno Le Maire said that the agreements are in euros and must make payments in euros. However, German Chancellor Olaf Scholz said Germany would only make payments for Russian gas in euros. Scholz told reporters that contracts state that payments should make in euros, sometimes in United States dollars.
European Countries Dependence on Russian Gas
The European Union (U.N.) relies on Moscow for around forty percent of its natural gas. However, the E.U. leaders set a target of cutting the consumption of Russian gas by around sixty-six percent by the year-end and are struggling to find alternative sources, including additional shipments of liquified natural gas from the U.S. As a result, according to experts, disruption to supplies of European gas is now more likely, but not predictable.
A spokesman for Britain Prime Minister Boris Johnson said the United Kingdom would not accept the Russian president’s demand. He added that Kwasi Kwarteng, the Energy Secretary made clear that this is not something that the United Kingdom would be looking into. On Wednesday, the German government triggered a three-stage plan for managing gas reserves in a crisis, issuing an initial earning of likely shortages.
Elsewhere, Bulgaria, which gets ninety percent of its gas through imports from Gazprom, opened a tender for underground drilling as part of efforts to almost double the gas storage capacity of the country and prepare for any gas supply disruptions. Whereas Britain wouldn’t be directly impacted by supply disruption, the rising prices in the worldwide market will affect as demand in Europe increases.
Read Also: Biden to Release 1m Barrels of Reserves Oil Per Day