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Russia will present the ruble payment mechanism on Thursday European countries, the G7 reject the requirements for the Russian ruble European gas prices are rising due to supply concerns
FRANKFURT / LONDON, March 29 (Reuters) – Russia said it would work out practical arrangements by Thursday for foreign companies to pay for their gas in rubles, raising the possibility of supply disruptions as Western nations have so far rejected demand. Moscow for currency change. President Vladimir Putin’s order last week to charge “unfriendly” states with rubles for Russian gas boosted the currency after falling to historic lows as the West imposed sweeping sanctions on Moscow for its invasion of Ukraine. “No one will supply gas for free, it is simply impossible and you can only pay for it in rubles,” Kremlin spokesman Dmitry Peshkov told reporters on Tuesday. Sign up now for FREE unlimited access to Reuters.com Register The speaker of the upper house of the Russian parliament, Valentina Matviyenko, said that Moscow is ready if Europe refuses to buy Russian energy and could redirect supplies to Asian markets, among others, TASS news agency reported. European countries, which pay mostly in euros, say Russia has no right to renew contracts. The G7’s team rejected Moscow’s demands this week. read more European wholesale gas prices recorded further gains this week amid concerns that supplies could be cut, although Russia has so far met its contractual obligations for gas sales to Europe. read more Peshkov said that, according to the March 31 deadline set by Putin for the ruble payments, “all the details are being developed so that this system is simple, understandable and feasible for respectable European and international buyers.” The G7 countries urged companies not to agree to ruble payments and said most supply contracts provided for euros or dollars. “This is a position we share,” a European Commission spokesman told a news conference in Brussels on Tuesday. The European Commission said last week it was evaluating scenarios that included a complete shutdown of Russian gas supplies next winter as part of a contingency plan for supply shocks. “DIVISION DAMAGES” Europe receives about 40% of its gas from Russia. Imports were about 155 billion cubic meters (bcm) last year. Putin’s demand has sparked fears in Germany, Europe’s top economy that relies heavily on Russian gas, about possible outages and the impact on industries and households if utilities do not pay in rubles. read more Without Russian supplies, the German economy has suffered “huge losses, which must be avoided in any way,” E.ON CEO Leonhard Birnbaum told German television, saying it took the country three years to become independent. natural gas. read more In the event of a shutdown, he said the German gas regulator would prioritize home heating over industrial use, so energy-hungry producers, such as the steel industry, would bear the brunt of any supply cuts. Data from Gas Infrastructure Europe show that the European Union’s gas storage facilities were now 26% full, underscoring the challenge of replacing Russia as an energy supplier. The European Commission has proposed legislation requiring EU countries to fill storage at least 80% this year. read more Markus Krebber, CEO of Germany’s largest utility company RWE (RWEG.DE) and a Gazprom customer (GAZP.MM), said that Germany could face a complete cessation of Russian gas imports only for a very short time. space. read more The head of the Ukrainian gas transmission network also said that Ukraine, through which some pipelines supplying Russian gas to Europe pass, had to accumulate 17 bcm of gas for the next winter by the end of October, saying that this would be difficult. The Refinitiv analyst wrote in a report that storage in the EU would be 23% by October 1 if Russian supplies stopped completely in the summer and there was no additional supply. “These levels pose an immediate threat to security of energy supply in Europe,” analysts said, adding that storage could reach 58% – still very low – if liquefied natural gas (LNG) emissions from the northwest were maximized. Europe and increase pipeline imports from alternative suppliers. Washington and Brussels reached an agreement last week for the United States to supply 15 bcm LNG this year, although that alone will not completely replace Russian gas imports. read more Sign up now for FREE unlimited access to Reuters.com Register Report by Reuters. Written by Christoph Steitz and Nina Chestney. Edited by Alexander Smith, David Evans and Edmund Blair Our role models: The Thomson Reuters Trust Principles.
