Russian President Vladimir Putin Signs Order Demanding Gas Payments in Rubles

Russian President Vladimir Putin signed an order demanding “unfriendly” countries to pay for gas in rubles starting from April 1 or Russia will cut supplies.

“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 in a televised appearance on March 31.

“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,” Putin further said.

The order authorizes the Russian state-controlled  Gazprombank to open foreign currency and ruble accounts for gas payments.

European buyers would pay in foreign currency, then Gazprombank will convert them into rubles for gas payments.

Putin’s demand has been seen as an attempt to boost the ruble, which collapsed due to Western sanctions that have been imposed since Russia invaded Ukraine in late February.

Western companies and governments have rejected Putin’s demand to pay in rubles, claiming that it was a breach of existing contracts.

Germany said the order amounted to “blackmail.”

“With regard to the threat, demand or consideration — one doesn’t know what to call it anymore — to be made to pay in rubles, it is crucial for us that the contracts are respected,” German Economy Minister Robert Habeck said at a press conference.

There are concerns that Putin would extend the ruble payment to exports of oil, grain, coal, and other key commodities.

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