Russian President Vladimir Putin listens to Novgorod Region Governor Andrei Nikitin during a meeting at the Kremlin in Moscow, Russia, March 22, 2022. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS
MARCH 23 – Russia plans to switch its gas sales to “unfriendly” countries to rubles, President Vladimir Putin said on Wednesday, responding to foreign nations freezing Russian assets over events in Ukraine he said they did would have destroyed Moscow’s confidence.
European countries’ dependence on Russian gas and other exports has come under the spotlight since Russia dispatched tens of thousands of troops to Ukraine on February 24 in a so-called special operation to weaken its southern neighbor’s military capabilities and the people it drafts root out dangerous nationalists.
“Russia will, of course, continue to supply natural gas according to the quantities and prices stipulated in previously concluded contracts,” Putin told a televised meeting with senior government ministers.
“The changes concern only the payment currency, which will be changed to Russian rubles,” he said.
Putin said the government and central bank have a week to come up with a solution on how to convert those operations to the Russian currency and that gas giant Gazprom (GAZP.MM) will be ordered to make the appropriate changes to gas contracts .
According to Gazprom, as of January 27, 58% of its natural gas sales to Europe and other countries were in euros. US dollars accounted for approximately 39% of gross sales and sterling for approximately 3%.
Russian gas accounts for about 40% of total gas consumption in Europe.
“An understandable and transparent payment procedure should be created for (all foreign buyers), including the purchase of Russian rubles on our domestic currency market,” Putin said.
Ukrainian forces are fiercely resisting Russia’s actions, and the West has imposed wide-ranging sanctions to force Russia to withdraw its forces.
Russia has created a list of “unfriendly” countries to match those that have imposed sanctions. Business dealings with companies and individuals from these countries must be approved by a government commission, among others.
The list of countries includes the United States, European Union member states, United Kingdom, Japan, Canada, Norway, Singapore, South Korea, Switzerland and Ukraine.
Reuters reporting; Edited by Kirsten Donovan and Alison Williams