Putin says Russia will implement ruble tariffs on gas from Friday

Russian President Vladimir Putin will attend a meeting with members of government on March 23, 2022 via video link at the Novo-Okario State House outside Moscow. Via Sputnik / Michael Clementev / Kremlin REUTERS

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March 31 (Reuters) – Russian President Vladimir Putin has signed a decree ordering foreign buyers to pay rubles for Russian gas from April 1, saying contracts would be suspended if the money was not paid.

“In order to buy Russian natural gas, they need to open ruble accounts in Russian banks. From these accounts will be paid for gas, which will be distributed from tomorrow,” Putin said in a televised comment.

“If such payments are not made, we will consider it a default on the part of the buyer, with all subsequent consequences. No one will sell us anything for free, and we will not do charity – that is, existing contracts will be terminated.”

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Russia supplies one-third of Europe’s gas, so energy is the most powerful lever as Putin seeks to retaliate against Western sanctions on his invasion of Ukraine.

His decision to implement ruble payments has boosted the Russian currency, which fell to a historic low after the February 24 invasion, but has since recovered.

Western companies and governments have rejected the move as a violation of existing agreements set in euros or dollars. France’s economic minister has said that France and Germany are preparing for a possible situation in which Russia’s gas flow could be halted – which could plunge Europe into a complete energy crisis.

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The order, signed by Putin, set up a mechanism for buyers to convert foreign currency into a special account in a Russian bank, which would return the ruble to the foreign buyer to pay for the gas.

He said the change would strengthen Russia’s sovereignty and ensure that it abides by its obligations under all agreements.

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Report by Reuters; Written by Mark Travelian, edited by Guy Falconbridge, Gareth Jones, Alexandra Hudson

Our standards: Thomson Reuters Trust Principles.

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