Paying in one currency is one thing, but if the operation involves the central bank of another country, it becomes a different package and it will be difficult to manage it. I think the Commission is doing its best to clear it up.”
Khashayar Farmanbar, Swedish Minister of Energy.
The European Union (EU) will not pay for its gas purchases from Russia in rubles, and therefore must prepare for a supply break, admitted a senior source from the European Commission at the end of the meeting of energy ministers in Brussels.
The European Commissioner for Energy, Kadri Simson, charged that the Russian demand to receive payments in rubles is a “unilateral and unjustified modification of the contracts and that is why it is legitimate to reject it.”
According to Simson, approximately 97% of the contracts signed by European companies to purchase Russian gas specify the euro or US dollar as the payment currency.
Simson mentioned that the payments that must be made in mid-May will be made according to the contracts. “We must prepare for a supply cut,” he warned.
This was the first meeting of European energy ministers after Russia cut off gas supplies to Poland and Bulgaria because both countries refused to pay in rubles for their liquefied gas imports.
Simson reported that the European Commission told the bloc countries that paying for Russian gas purchases in rubles represents a breach of the sanctions adopted by the EU against Russia.
However, at the request of the ministers themselves, the Commission will provide more detailed guidance on what companies can and cannot do under the sanctions.
The issue has become a huge headache for the EU, since practically 40% of the liquefied gas used by European industry comes from Russia.
The possibility of Russia cutting off gas supplies to countries that refuse to pay in rubles flashes warning lights.
“I have asked for a clear explanation on how to proceed,” Czech Industry and Trade Minister Jozef Sikela said.
Khashayar Farmanbar, Sweden’s energy minister, said clarifications are underway, but it is a very complex process.
Polish Climate Action and Environment Minister Anna Moskwa said the Commission confirmed that paying in rubles is unacceptable and assured that her country is ready to help Germany wean itself off its dependence on Russian oil.
Germany is in favor of embargoing oil
Germany said it was prepared to back an immediate European Union embargo on Russian oil, which would allow Europe to impose such a ban within days.
Russia’s energy exports, its biggest source of income, have so far been exempt from international sanctions. kyiv says that loophole means European countries are funding the Kremlin’s war effort, sending Moscow hundreds of millions of euros every day.
Chancellor Olaf Scholz has come under increasing pressure to take a tougher line, including from within the ruling Social Democrat coalition.
Germany had already reduced the share of Russian oil in its imports to 12% from 35% before Russia invaded Ukraine, although it has said it needed months to phase out Russian crude and lessen the economic impact this decision would bring.
Eastern parts of Germany depend on fuel from a refinery owned by the Russian state oil company Rosneft. (Reuters)