Ruble-Based Payment Scheme Offers Guarantees to Russia - Lavrov

According to the minister, the decision made by Russia to demand payment in rubles for natural gas exports is quite understandable since Russian foreign assets have been frozen due to sanctions imposed after Moscow's special operation in Ukraine. 

RELATED:
Start of New Phase of Russia’s Special Operation in Ukraine

Lavrov said that since Gazprom's foreign bank accounts can easily be frozen due to sanctions, Western buyers will instead pay for gas using Gazprombank, an independent institution, through a special account they will have to open at this bank.

The official went on to say that Gazprombank will be handling the conversion of payments into rubles, as buyers will continue to make their payments in the currency of their preference. 

Thus, Russia will have guarantees even if buyers pay in euros or dollars, Lavrov said, noting that Russian gas supplier Gazprom will be able to be paid the amount owed in the national currency removing the threat posed by sanctions. 

On March 31, a decree signed by the President of Russia, Vladimir Putin, brought into force a new mechanism based on the ruble for the payment of Russian natural gas deliveries. 

The new mechanism required that non-friend countries that have imposed sanctions on Moscow will no longer be able to use Gazprom's accounts in foreign banks to make payments but will have to transfer gas payments through the authorized Russian bank.

In this regard, the Russian government issued a warning that countries refusing to change to the new payment mechanism will default on their current gas supply contracts resulting in a halt in supplies.