Russia unveils plan how Europe can pay for natural gas in rubles

Russia offered Europe to continue paying for natural gas in euros, albeit through a Russian bank, in which a ruble account would be open, RBC reports.

It remains unknown which bank it is going to be exactly. Steffen Hebestreit, an official representative of the German government, said that Russian President Vladimir Putin and German Chancellor Olaf Scholz were discussing Gazprombank, which is one of the largest banks in Russia. Gazprombank is not subject to EU sanctions.

Russia has not made any public statements about the details of the new mechanism. The Kremlin press service said that Putin assured German Chancellor Scholz that contractual conditions for importers would be preserved.

On March 30, Deputy Foreign Minister of Russia Sergey Ryabkov said that Moscow was hoping for a creative decision that Europe would take to change the format of payments. For the time being, European buyers have strongly refused to comply with Russia's ultimatum.

Putin signs rubles for gas decree

Russian President Vladimir Putin signed a decree on the rules of gas trade with "unfriendly countries," RIA Novosti reports. 

“Today, I signed the decree that establishes the rules for trading Russian natural gas with so-called unfriendly states,” Putin said during a meeting on developing the sanctions-hit aviation industry.

According to the decree, in order to purchase Russian natural gas, such states will have to open ruble accounts in Russian banks, from which payments for natural gas will be made. The new payment procedure will come into force on April 1.

If unfriendly countries refuse to pay for gas in rubles, Russia will find their contractual obligations unfulfilled, he added. 

Following Putin's announcement, gas prices in Europe rose. The cost of gas in Europe increased to $1,395 per thousand cubic meters, according to the data from London Stock Exchange ICE.