Gas Companies Respond to Russia’s Demand for Payment in Rubles


The European Commission finally offered clarity on how countries and companies should proceed in buying Russian gas, Reuters reports.

At the end of March, Moscow started requiring that foreign buyers start purchasing Russian gas in rubles. On Tuesday the Commission announced that opening accounts in rubles at a Russian bank would be a breach of the sanctions against Russia.

Originally it was said that the EU sanctions in place do not prevent companies from opening an account at a bank and can continue to pay for Russian gas but only in the currency that was agreed upon in pre-existing contracts. Most contracts between EU companies and the Russian company Gazprom are in euros or dollars.

The Commission’s recent announcement clarified that an account in rubles opened at Gazprombank would not agree with sanctions.

Russian gas has, for a long time, been powering countries all over Europe. Heating homes and providing power are necessary and with difficulties in paying for Russian gas, companies are having trouble finding solutions.

Finland’s state-owned company Gasum took the stance of refusing to make payments under Gazprom’s requests.

The CEO of Gasum Mika Wiljanen announced that they will take their contract with Gazprom to arbitration and do their best to continue supplying customers with energy. Conversely, the French power firm Engie will be making their next payment to Gazprom in euros through a solution in agreement with EU sanctions.

Germany’s RWE had already announced that an account was opened in Russia to pay in euros and Italy’s Eni had delayed an announcement of their decision which ultimately was that they will open an account in rubles.

Russian President Vladimir Putin declared that transactions would only be completed after the foreign currency was converted into rubles which would require companies to open two bank accounts – one for each currency. Russia has already cut gas supplies to Bulgaria and Poland last month when they refused to proceed with Russia’s rubles demand.

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