EU Commission working on guidelines for gas payments

The European Union Commission is developing more precise guidelines on how EU countries can continue to pay for Russian gas supplies without violating sanctions against Russia. “Many European energy companies have to make the next payment to Gazprom in mid-May and are trying to better understand what to do,” EU Energy Commissioner Kadri Simsun said after a special meeting of EU ministers today.

“EU countries and companies should have no illusions about the possibility of relying on the goodwill of Gazprom and the Russian authorities in this field.” Russia halted gas supplies to Poland and Bulgaria last Wednesday after the European Union member countries did not initiate a new payment system. In rubles demanded by Russia.

Energy security ‘not in danger’

To avoid similar steps in their own countries, EU countries have called for more guidance. Simpson stressed that the EU’s energy security is not at risk at this point in time. Storage is over 32 percent full. But you have to be prepared for possible supply disruptions, Simpson said.

The EU Commission has already made clear that the ruble payment of gas shipments requested by Russia violates sanctions. During the exchange of money in rubles in a separate account, the money is in the hands of the Central Bank of Russia, which is punishable by the European Union. The EU Commission does not believe that the sanctions have been violated as long as the companies continue to pay in euros and the payment is recognized as having been made before being replaced by the ruble. Accordingly, about 97 percent of gas contracts in the European Union are denominated in dollars or euros.

Gazprombank converts payments into rubles

At the end of March, Kremlin President Vladimir Putin demanded that Western countries open accounts with Gazprombank in Russia from April 1 in order to pay for Russian gas. Otherwise, deliveries to “unfriendly” countries will be stopped. According to a decree signed by Putin, payments can still be deposited into the Russian account in euros or dollars.

Gazprombank converts money into rubles and transfers the amount in Russian currency to Gazprom. Putin threatened that if payments were not made, deliveries would be halted.