BBC Online :
Russia has told foreign countries they must start paying for its gas in roubles or it will halt supplies.
Vladimir Putin has signed a decree stating buyers must “must open rouble accounts in Russian banks” from Friday.
“Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped,” the Russia president said. Mr Putin’s demand is being seen as is an attempt to boost the rouble, which has been hit by Western sanctions.
Western companies and governments have rejected Russia’s demands to pay for gas in roubles as a breach of existing contracts, which are set in euros or US dollars.
Since Russia invaded Ukraine, Western nations have issued economic and trading sanctions on Russia, but the European Union has not placed bans on oil or gas, unlike the US and Canada, as its member nations rely heavily on it.
The EU gets about 40% of its gas and 30% of its oil from Russia, and has no easy substitutes if supplies are disrupted.
Germany, which gets about half its gas and a third of its oil from Russia, has urged its citizens and companies to reduce consumption in anticipation of possible shortages, while Austria, which imports about 40% from Russia, is tightening its monitoring of the gas market.
Germany and France said the change announced by Mr Putin amounted to “blackmail”.
Mr Putin said the switch to roubles was meant to strengthen Russia’s sovereignty, and it would stick to its obligations on all contracts, if Western nations obliged.
The announcement comes after Moscow appeared to soften its stance on Wednesday over demanding rouble payments, saying they would be introduced gradually.
The order signed by Mr Putin means foreign buyers of Russian gas will have to open an account at Gazprom bank and transfer euros or US dollars into it.
The bank will then use the currency to buy roubles on the stock exchange which will then be used to make the payment for gas.
Analysts say making nations pay in roubles for gas will support the country’s currency, which fell sharply after the invasion but has begun to recover.
In preparation for gas supply disruption, Germany and Austria have triggered emergency plans amid a payments stand-off with Russia.
Under an existing gas emergency plan, the “early warning phase”, which both Germany and Austria have begun, is the first of three steps designed to prepare the country for a potential supply shortage. In its final stage, the governments would bring in gas rationing.
While the UK would not be directly impacted by supply disruption, as it imports less than 5% of its gas from Russia, it would be affected by prices rising in the global markets as demand in Europe increases.
