MOSCOW/LONDON: Vladimir Putin on Thursday threatened to turn off gas supplies of countries in Europe from Friday if they refuse to pay in roubles. These contracts for supply of gas were until now only in dollars and Euros.
Putin's demand for rouble payments is an attempt to shore up the currency, which has been hit by sanctions from the West. The move has deepened the simmering energy crisis in the European Union, which relies on Russia for around 40 per cent of total consumption.
Putin on Thursday signed a decree stating foreign buyers must "must open rouble accounts in Russian banks," which can be used to pay for gas deliveries starting from Friday.’’
‘‘If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences. Nobody sells us anything for free, and we are not going to do charity either - that is, existing contracts will be stopped,’’ Putin added in televised remarks.
'Russia will continue, of course, to supply natural gas in accordance with volumes and prices... fixed in previously concluded contracts,' he said, adding that sanctions had 'destroyed Moscow's trust'. The diktat will apply to ‘unfriendly countries’ which have imposed sanctions.
Western companies and governments have rejected the move as a breach of existing contracts, which are mostly in euros and dollars. According to Gazprom, 58 per cent of its sales of natural gas to Europe and other countries as of January 27 were settled in euros. US dollars accounted for about 39 per cent of gross sales and sterling around three per cent.
The list of 'unfriendly' countries includes the United States, European Union member states, Britain, Japan, Canada, Norway, Singapore, South Korea, Switzerland and Ukraine.
Meanwhile, heavy fighting raged on the outskirts of Kyiv and other zones on Thursday amid indications the Kremlin is using talk of de-escalation as cover while regrouping and resupplying its forces and redeploying them for a stepped-up offensive in eastern Ukraine.
Ukrainian President Volodymyr Zelensky said in an early morning video address that Ukraine is seeing “a build up of Russian forces for new strikes on the Donbas, and we are preparing for that."
Meanwhile, a convoy of buses headed to Mariupol in another bid to evacuate people from the besieged port city after the Russian military agreed to a limited cease-fire in the area. And a new round of talks aimed at stopping the fighting was scheduled for Friday.