The EU has said it will deny Russian demands for member states to pay for oil and gas from national energy company Gazprom in roubles.
European commissioner for energy Kadri Simson commented that Moscow’s ultimatum to pay in Russian currency or forfeit the supply of Moscow’s energy exports had been rejected, following a meeting of EU energy ministers on Monday.
The move followed Russia’s decision to cut off the supply of gas to Poland and Bulgaria last week, with Putin threatening to continue the trend throughout Europe.
The EU faces a tricky situation, as the trade bloc imported approximately 155 billion cubic metres of natural gas from Russia in 2021, representing around 45% of EU gas imports and an estimated 40% of its overall gas usage.
There is currently no alternative fuel source which could account for the missing resources from Russia, which has put European member states in an unenviable predicament.
Russia has demanded that member states pay for gas imports in Roubles, in direct violation of sanctions which have banned anti-Russian countries from making payments in the currency.
Putin issued decree 172 in March, which laid down orders for purchasers of Russian gas to open two accounts at Russian Gazprombank, and pay euros and dollars into one account, which would be converted into roubles and paid to Gazprom from the second account.
The next payment due to Gazprom is scheduled for 20 May, leaving countries little time to come up with an alternative supply if they want to avoid breaching sanctions.
“Many European energy companies are due to make the next payment to Gazprom in mid-May and are trying to understand better what they should do and we need to give them the clarity that paying in roubles through the conversion mechanism managed by the Russian public authorities and a second dedicated account at Gazprom bank is a violation of the sanctions and cannot be accepted,” said Simson.
Member states are currently bracing themselves for the Putin to cut off the supply of gas, with many warning that hard times were ahead and prices would climb to unpleasant heights.
“We will be harming ourselves, that much is clear. It’s inconceivable that sanctions won’t have consequences for our own economy and for prices in our countries,” said German economic minister Robert Habeck.
“We as Europeans are prepared to bear [the economic stress] in order to help Ukraine. But there’s no way this won’t come at a cost to us.”