20 Apr 2022 7:45 am
With the new ruble-based payment mechanism for gas, Moscow is creating guarantees, Russian Foreign Minister Sergei Lavrov said. This ensures that payments for gas supplies are not the target of new sanctions.
Russia’s decision to switch the payment mechanism for natural gas exports to local currency “stands obvious and understandable in the light of Western sanctions” that have frozen half of Russia’s foreign assets, the country’s Foreign Minister Sergei Lavrov said in an interview with India Today on Tuesday .
According to the top Russian diplomat, buyers in the West will no longer be able to pay for gas through gas supplier Gazprom’s overseas accounts, which can easily be frozen under sanctions. Instead, “they will pay through Gazprombank, an independent institution.”
“They will pay the same amount that they owe under the existing contracts, but they will pay it through a special account that they have to open at this bank,” Lavrov said. He explained that even if customers still make payment in the currency of their choice, Gazprombank will convert payments into rubles. This allows the Russian company Gazprom to receive the amount owed in the local currency without the risk that these balances will be the target of sanctions.
“They will not keep this money in their banks. They will still pay in euros or dollars, but we have guarantees,” Lavrov said.
In response to Western sanctions, Russian President Vladimir Putin issued a decree on March 31 introducing a new ruble-based payment mechanism for Russian gas supplies. Under the terms of the agreement, buyers from “unfriendly states” that have imposed sanctions on Russia must make their gas payments through the designated Russian bank instead of Gazprom’s accounts with foreign banks. Countries that refuse to implement the new payment mechanism will be breaking their current gas supply contracts and supplies will be halted, the Russian government has warned.
More on the subject – EU Commission: “Paying for Russia’s natural gas in rubles violates sanctions”