31 Mar 2022 17:40

Putin signs decree to transition to ruble settlements for gas with unfriendly countries, effective from April

MOSCOW. March 31 (Interfax) - Russian President Vladimir Putin announced that he has signed a decree on transitioning to payments for natural gas in rubles for unfriendly countries when opening a meeting on the development of the aviation sector.

"I signed a decree today that sets the rules for trading in Russian natural gas with so-called unfriendly states. We're proposing a clear and transparent arrangement to counterparties from such countries. In order to acquire Russian natural gas, they should open ruble accounts in Russian banks. It is from these accounts that payments for gas delivered starting tomorrow, April 1 of this year, will be carried out," Putin said.

"If such payments are not made, we will consider this non-fulfillment of obligations on the part of the buyers, with all ensuing consequences. No one sells us anything for free, and we also are not about to engage in charity. That is, the existing contracts will be discontinued," he said.

"In a situation in which the financial systems of Western countries are being used as a weapon, when companies from these states refuse to fulfill contracts with Russian banks, enterprises, individuals, when assets in dollars and euros are being frozen, there's no point in using the currency of those countries. In fact, what is happening, what has happened - we supplied our resources to European consumers, in this case gas. They received it and paid us in euros, which they themselves then froze. With that in mind, there is every reason to consider that we delivered part of the gas supplied to Europe essentially for free. Naturally, it can't go on like this. Even more so if, in the case of further supplies of gas and payment for them using the traditional arrangement, new financial proceeds in euros or dollars can also be blocked. Such a development of the situation is completely predictable, particularly as certain politicians in the West are talking about that, speaking publicly. Furthermore, the heads of government of European Union countries are speaking out exactly along these lines. The risks of the current state of affairs are for us, of course, unacceptable," Putin said.

"Changing payments for Russian gas supplies over to Russian rubles is an important step toward strengthening our financial and economic sovereignty," Putin said. "We will further move in this direction consistently and systematically within the framework of a long-term plan, increase the share of payments in national currency and the currencies of those countries that are reliable partners in external trade. Speaking of which, you've probably heard that many traditional suppliers of energy resources on the global market are also already talking about diversifying currency payments," he said.

Russia cares for its business reputation, Putin said.

"We adhere to and are going to adhere to our obligations on all contracts going forward, including gas contracts. We will continue to supply gas in the set volumes, I want to emphasize this, and at the prices designated in the existing long-term contracts. I will emphasize that these prices are exponentially lower than the current quotations on the spot market. What does this mean? To speak plainly, Russian gas is cheaper energy, heat, and light in the homes of Europeans, is affordable fertilizer for European farmers, and consequently, is affordable food products, as well, in the end. Finally, this is the competitive performance of European enterprises, and that means the salaries of Europeans, citizens of European countries, as well," he said.

The decree says special accounts in rubles for Russian gas payments will be opened at Gazprombank.

Gazprombank will sell currency deposited by buyers of Russian gas to a special account on the Moscow Exchange.

The decree says the government commission on foreign investment will have right to make exceptions from new procedure of payment for gas for buyers.

It also says the special accounts to pay for gas will be protected by immunity - freezing or writing off funds on liabilities unrelated to gas is banned.