A Latvian gas operator says the procedure doesn’t breach Western sanctions
Baltic state may agree to pay for Russian gas in rubles
Latvia’s main gas operator says it won’t rule out paying for Russian natural gas in rubles, revealing that the new settlement method announced by Moscow is being evaluated from a legal and business perspective.
“According to the first impression, the settlement procedure in Russian rubles does not formally violate the sanctions regime and is possible,” Latvijas Gaze said in a statement.
Earlier, Aigars Kalvitis, the board chairman of Latvijas Gaze, which is partially owned by Russia’s Gazprom, said the company couldn’t pay for natural gas supplies from Russia in rubles, since the current contract stipulates that all transactions must be made in euro.
Slovakia agrees to pay for Russian gas in rublesREAD MORE: Slovakia agrees to pay for Russian gas in rubles
Last week, Russian President Vladimir Putin ordered the government to take necessary steps to switch all payments for gas sales involving “hostile” countries to Russian currency from April 1. According to the Kremlin, the change concerns nations that imposed sanctions against Russia with the intention of damaging the country’s economy, which includes most EU member states.
Putin warned EU countries that they would need to set up ruble accounts to pay for Russian gas, saying that existing contracts would be halted if the payments were not made.
On Saturday, the head of Latvia’s natural gas storage operator Conexus Baltic Grid said that all the Baltic states – Latvia, Estonia and Lithuania – were no longer importing Russian natural gas.
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Slovakia agrees to pay for Russian gas in rubles
The country cannot afford to lose its major supplier
Slovakia agrees to pay for Russian gas in rubles
© Getty Images / alexkich
Slovakia will pay for Russian natural gas in rubles if that’s what it takes to keep the commodity flowing, Slovak Economy Minister Richard Sulik has said on national television.
“If there is a condition to pay in rubles, then we will pay in rubles,” Sulik said. He stressed that Russian imports account for roughly 85% of all Slovakian gas supplies, so the country’s authorities will remain pragmatic on the issue.
“We cannot be cut off from gas,” Sulik emphasized, urging the rest of Europe to jointly seek a solution.
Nearly all of the countries of the European Union, of which Slovakia is a member, slapped Russia with economic sanctions over the past month, jeopardizing Russia’s ability to receive payments from trade partners in the European currency. In response, Russian President Vladimir Putin last week signed a decree introducing a new ruble gas payment mechanism.
Moscow explains switch to ruble for gas paymentsREAD MORE: Moscow explains switch to ruble for gas payments
Although it is viewed by some as going against existing gas contracts, the mechanism does not imply a change of the currency of payment. It enables buyers to open ruble accounts with Russian Gazprombank to facilitate the transfer of European companies’ payments to Russian suppliers.
According to Putin’s press secretary Dmitry Peskov, “de facto nothing will change for European companies… They will pay, as they used to, in euro, the same currency that is indicated in the contracts,” but the seller, Russia’s major gas exporter Gazprom, will be able to receive the funds in Russia’s national currency. Despite extensive explanations, however, many Russian buyers found themselves puzzled by the change. The initial reaction was mostly one of protest, with countries claiming they would not pay for gas in rubles. However, it appears that this will not be necessary at all.
The Slovakian economy minister, along with a number of other European politicians, said the situation calls for diversification of suppliers. But he said this may take years, while Slovakia has only two months to solve the current problem with fuel purchase
