From today, Western states must pay in rubles for Russian gas

“to buy Russian gas, they must open accounts in the rubles at Russian banks. Those accounts will pay the gas, starting April 1st. If these payments are not made, we will consider this a failure by the client to meet his” obligations, Putin said in a television presentation Thursday.

The decree Putin signed Thursday authorising state-controlled Gazprombank to open currency and ruble accounts for gas purchases. European buyers would pay in foreign currency and then authorise Gazprombank to make conversions to rubles, which would then be used to officially buy gas.

The G7 Group of advanced economies -- United States, Great Britain, France, Germany, Italy, Japan and Canada -- had refused to accept the fulfillment of Putin's demand for payment in rubles.

The blockade had already prompted Germany and Austria to make preparations for possible gas rationing, while activating an emergency plan designed to help it cope with any disruptions in supplies from Russia.

Putin spoke to German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi of the new agreement Thursday. Both tried to calm the fears of a gas closure, with Scholz telling reporters that he believed Germany would continue to pay for gas in euros.

There is fear that Putin may extend the pay plan with ruble to include oil, wheat, waste, coal, metal and other major goods exports, the Guardian reports, Klonkosova.tv records.

The value of the ruble fell after Russia invaded Ukraine, after making a partial recovery. With the currency still traded at low levels, Russian exports bring less money to subsidise state services and finance war than previously expected.

The country has forced major exporters to sell 80 per cent of their foreign currency in order to support the ruble, as Russia faces unprecedented sanctions for its invasion in Ukraine.

The gas payment plan would carry out a similar function, though it is not clear why it would make any difference whether foreign buyers or Russian exporters are the ones who would convert dollars and the euro into rubles.