October 6, 2022

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Putin says Russia will convert gas sales into rubles for 'unfriendly' countries

Putin says Russia will convert gas sales into rubles for ‘unfriendly’ countries

Russian President Vladimir Putin listens to Novgorod Region Governor Andrei Nikitin during a meeting at the Kremlin in Moscow, Russia on March 22, 2022. Sputnik/Mikhail Klementev/Kremlin via Reuters

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(Reuters) – Russian President Vladimir Putin said on Wednesday that Russia plans to shift its gas sales to countries “unfriendly” to the ruble in response to the freezing of Russian assets by foreign countries over events in Ukraine that he said destroyed Moscow’s confidence.

European countries’ dependence on Russian gas and other exports has been under the spotlight since Russia sent tens of thousands of troops to Ukraine on February 24 in what it called a special operation to undermine and eradicate its southern neighbor’s military capabilities. Dangerous nationalists.

“Russia will, of course, continue to supply natural gas in accordance with the quantities and prices … specified in the contracts concluded previously,” Putin said in a televised meeting with senior government ministers.

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“The changes will only affect the payment currency, which will change to Russian rubles,” he said.

Putin said that the government and the Central Bank have one week to come up with a solution on how to transfer these operations into the Russian currency and that gas giant Gazprom. (GAZP.MM) Corresponding changes to gas contracts will be required.

According to Gazprom, 58% of its natural gas sales to Europe and other countries as of January 27 were settled in euros. The US dollar made up about 39% of the total sales and the British pound about 3%.

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Russian gas accounts for about 40% of the total gas consumption in Europe.

“An understandable and transparent procedure for making payments (for all foreign buyers) should be established, including the acquisition of the Russian ruble in our local currency market,” Putin said.

Ukrainian forces put up stiff resistance to Russia’s actions and the West imposed sweeping sanctions on Russia in an attempt to force it to withdraw its forces.

Russia has drawn up a list of “unfriendly” countries identical to those that have imposed sanctions. Among other things, deals with companies and individuals from those countries must be approved by a government commission.

The list of countries includes the United States, member states of the European Union, Britain, Japan, Canada, Norway, Singapore, South Korea, Switzerland and Ukraine.

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Reporting by Reuters. Editing by Kirsten Donovan and Alison Williams

Our criteria: Thomson Reuters Trust Principles.