Putin demands payment in roubles for Russian gas supplies or contracts will be ‘halted’

Russian President Vladimir Putin has said, from tomorrow, countries buying gas from Russia must pay in roubles or their contracts will not be honoured.Vladimir Putin is imposing new restrictions on the sale of Russian gas

In a televised statement on Thursday, Mr Putin said he had signed a decree to that effect, adding that the switch to roubles was designed to “strengthen our sovereignty” and protect Russian jobs.

He said: “In order to purchase Russian natural gas, they must open rouble accounts in Russian banks.

“It is from these accounts that payments will be made for gas delivered starting from tomorrow.

“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.”

Exisiting contracts will be honoured, however, provided customers follow the new rules, he added.

Russia supplies about a third of Europe’s gas and the new restrictions are likely to be of concern to Germany and Poland, especially, as large buyers.

If Moscow decided to cut off existing gas flows, it could plunge Europe into a full-blown energy crisis.

France’s economy minister Bruno Le Maire said France and Germany were preparing for a just such a scenario.

Western companies and governments have rejected the move as a breach of existing contracts, which are set in euros or dollars.

German Chancellor Olaf Scholz said he had told his Russian counterpart that will keep paying for its gas supplies in those currencies.

Germany’s Economy Minister, Robert Habeck, said Western allies are determined to not be “blackmailed” by Moscow, calling the move an attempt to divide them over energy supplies, which “has failed”.

Both Germany and Poland are aiming to stop using Russian energy by the end of the year, their leaders have said.

Mr Putin is believed to have been surprised at the strength and breadth of western sanctions imposed after the invasion of Ukraine.

He told his audience the US was profiting from the global instability, adding that the post-Ukraine sanctions “had been prepared beforehand”, and warning the West will try to find new reasons for further measures.

The rouble fell to historic lows after Russia invaded Ukraine on 24 February, but has since recovered.

Washington responded to Mr Putin’s statement by adding a further 13 people and 21 entities, including Russia’s largest manufacturer and exporter of microelectronics and Russia’s largest chipmaker. Thursday’s move also targeted “malicious cyber actors,” the US Treasury said.

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