Putin Signs Decree to Foster Gas Payments in Rubles

On Thursday, President Vladimir Putin signed a decree on new rules of natural gas trade with "unfriendly" countries, vowing to halt existing contracts if these buyers refuse to pay in rubles.

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"We offer those countries a clear and transparent mechanism: to buy natural gas from Russia, they must open ruble accounts in Russian banks. Payments for the supplied gas will be made from these accounts starting tomorrow," Putin said.

The decree specifies that the authorized bank for gas-related operations is Gazprombank, which is one of the few Russian entities that has not been sanctioned by the European Union (EU). Currently, this financial institution and the Sberbank process a large part of the energy operations with the block.

Russia will not do "charitable works" regarding the supply of gas to other countries. "If such payments are not made, we will consider this a default by the buyers with all the resulting consequences. Nobody sells us anything for free and we won't do charity work either," he said, warning that existing contracts will be suspended if countries don't pay for gas in rubles.

Putin recalled that European countries have already received gas but have paid for it in euros "which they then froze... In this sense, we have supplied part of the gas to Europe practically for free."

However, the decree gives the Foreign Investment Control Commission the authority to grant "permissions" to foreign buyers to pay for unfulfilled gas without having to comply with the established procedure on payment in rubles.

On March 8, the Russian Government defined as unfriendly countries the United States, Canada, all EU member countries, the United Kingdom, Ukraine, Montenegro, Switzerland, Albania, Andorra, Iceland, Liechtenstein, Monaco, Norway, San Marino, North Macedonia, Japan, South Korea, Australia, Micronesia, New Zealand, Singapore, and Taiwan.