# Europe strains for clarity as Russia stands by roubles-for-gas demand Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-29 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Russian Gas Payment Dispute Sparks Concerns in Europe Meta Description: Stay updated on the conflict between companies and countries over Moscow's rouble-for-gas payment system. Get insights on the implications and potential URL: https://financedigest.com/europe-strains-for-clarity-as-russia-stands-by-roubles-for-gas-demandhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-04-29t144153z1lynxnpei3s0lurtroptp3ukraine-crisis-germany-gas-measures-1736815791473-compressed.jpg) By Kate Abnett and Francesco Guarascio BRUSSELS (Reuters) – Companies and countries were at odds over Moscow’s rouble-for-gas payment system on Friday, while European officials promised more guidance on whether buying Russian gas can comply with sanctions and Russia said it saw no problem with its plan. Russia cut gas supplies to Bulgaria and Poland on Wednesday after they refused to abide by the demand issued in a Russian presidential decree last month for gas payments in roubles, prompting concerns other countries could be the next to be hit. Germany, which imports around half of its gas from Russia, said on Friday energy companies can open special accounts with Gazprombank to pay for Russian gas, without breaching sanctions if transferring [euros or dollars](https://www.financedigest.com/dollar-jumps-euro-dips-before-fed-minutes.html "Dollar jumps, euro dips before Fed minutes") to them fulfils their contractual obligations. It did not specify whether companies could do this and also [open a rouble](https://www.financedigest.com/russian-rouble-opens-flat-sticks-to-60-mark-against-u-s-dollar.html "Russian rouble opens flat, sticks to 60-mark against U.S. dollar") account, as requested by Russia, without being in breach of EU sanctions. Denmark’s Orsted said it has no intention of opening a [rouble account in Russia](https://www.financedigest.com/renault-to-offload-its-stake-in-lada-maker-for-one-rouble-russia-says.html "Renault to offload its stake in Lada maker for one rouble, Russia says"), although it declined to comment on payment in other currencies. [Italy’s ENI also said it had not opened](https://www.financedigest.com/italy-open-to-selling-down-mps-stake-on-market-if-terms-buyers-are-right-sources.html "Italy open to selling down MPS stake on market if terms, buyers are right – sources") an account in roubles. Under Russia’s mechanism, buyers are obliged to deposit [euros or dollars](https://www.financedigest.com/dollar-slips-after-upbeat-china-data-euro-pound-rise.html "Dollar slips after upbeat China data; euro, pound rise") into an account at privately-owned Russian bank Gazprombank, which has then to convert them into roubles, place the proceeds in another account owned by the foreign buyer and transfer the payment in Russian currency to Gazprom. EU energy ministers will on Monday [hold an emergency meeting to discuss their response to Russia’s demand](https://www.financedigest.com/ibm-beats-first-quarter-profit-estimates-signals-demand-holding-up.html "IBM beats first-quarter profit estimates, signals demand holding up"). The European Commission, the EU executive, has already said countries may be able to make sanctions-compliant payments provided they declare their payments are completed once it has been made in [euros and before it is converted into roubles](https://www.financedigest.com/rouble-eases-from-near-4-week-high-vs-dollar-firms-vs-euro.html "Rouble eases from near 4-week high vs dollar, firms vs euro"). EU countries, however, have said they want more clarity, while Germany, the bloc’s biggest economy and among the most dependent on Russian gas, [says it cannot afford to stop buying](https://www.financedigest.com/sega-sammy-says-it-is-considering-buying-angry-birds-maker-rovio.html "Sega Sammy says it is considering buying Angry Birds maker Rovio") Russian supplies, even though it is taking steps to find alternative sources of energy. A European Commission official told Reuters on [Friday the executive will provide EU countries with extra guidance following complaints from some countries that ambiguity would leave different countries reaching](https://www.financedigest.com/new-zealand-navy-vessels-with-supplies-to-reach-tsunami-hit-tonga-on-friday.html "New Zealand navy vessels with supplies to reach tsunami-hit Tonga on Friday") different interpretations of what they were allowed to do. [Russia on Friday said it saw no problem with its proposed system](https://www.financedigest.com/russias-national-payments-system-the-journey-so-far.html "RUSSIA’S NATIONAL PAYMENTS SYSTEM: THE JOURNEY SO FAR"). If the established procedure for interaction between gas buyers and the authorised bank is observed by the buyer, and there are no problems for the authorised bank in terms of selling currency on the stock exchange due to restrictive measures on the part of foreign states, then there cannot be any obstacles to [paying for and receiving natural](https://www.financedigest.com/best-paying-jobs-in-natural-gas-distribution.html "Best paying jobs in natural gas distribution") gas,” Russian Central Bank Governor Elvira Nabiullina said. The rouble has to an extent benefited from Moscow’s demand for roubles payment. The currency hit its highest level versus the euro in more than two [years on Friday](https://www.financedigest.com/extraordinary-rollercoaster-good-friday-talks-remembered-25-years-on.html "‘Extraordinary rollercoaster’, Good Friday talks remembered 25 years on") supported by capital controls as the central bank cut interest rates for the second time this month. European gas prices have [hit record](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") levels since the invasion of Ukraine by Russia, Europe’s top gas supplier, and were up slightly on Friday. HELPFUL ‘MESSINESS’ Central to the confusion on the part of the European buyers is whether Russia would only consider the payment to be complete after the gas-to-roubles conversion is done – a [transaction that would involve Russia’s central bank](https://www.financedigest.com/igtb-launch-digital-transaction-banking-available-as-saas.html "iGTB launch Digital Transaction Banking available as SaaS"), which is subject to EU sanctions. Speaking on condition of anonymity, an EU diplomat admitted a certain amount of ambiguity could be helpful as the bloc [seeks to prevent](https://www.financedigest.com/eu-seeks-deal-on-law-preventing-import-of-deforestation-linked-goods.html "EU seeks deal on law preventing import of deforestation-linked goods") any widening of divisions between countries, which have different levels of reliance on Russia and different deadlines to make payments. “In the circumstances, a little bit of a messiness might just be preferable,” the diplomat said. Poland and Bulgaria have contracts with Gazprom due to expire at the end of this year, which meant their [search for alternative](https://www.financedigest.com/eu-considers-ban-on-forever-chemicals-urges-search-for-alternatives.html "EU considers ban on ‘forever chemicals’, urges search for alternatives") supplies was already advanced. Poland also has very [healthy gas stocks around](https://www.financedigest.com/tantalum-carbide-coating-for-graphite-market-is-estimated-to-expand-at-a-healthy-cagr-of-around-5-over-the-forecast-period-of-2021-2031.html "Tantalum Carbide Coating For Graphite Market is estimated to expand at a healthy CAGR of around 5% over the forecast period of 2021-2031") 77% full. Austria’s OMV,, which has a contract with Gazprom until 2040, said it was analysing how a change could be implemented for it to pay in roubles without breaching sanctions when [next payment](https://www.financedigest.com/the-next-frontier-of-payments.html "The next frontier of payments") is due in May. Germany’s advice on Friday echoed that given by the Commission last week, but the Commission also [warned complying fully with Russia’s](https://www.financedigest.com/barclays-warns-of-sub-parity-euro-5-ppt-gdp-hit-if-russia-turns-off-gas-taps.html "Barclays warns of sub-parity euro, 5 ppt GDP hit if Russia turns off gas taps") scheme could breach the bloc’s sanctions. [Germany’s leading energy](https://www.financedigest.com/in-germany-energy-price-shock-triggers-fears-of-insolvency-wave.html "In Germany, energy price shock triggers fears of insolvency wave") companies Uniper and RWE both declined to comment. EnBW’s VNG [unit on Friday said it is staying within the law when it comes to paying](https://www.financedigest.com/finnish-businessman-zilliacus-ready-to-pay-premium-for-manchester-united.html "Finnish businessman Zilliacus ready to pay premium for Manchester United") for Russian volumes required under current currency requirements, adding it will not unveil details of contracts with its suppliers.. (Reporting by Kate Abnett, Francesco Guarascio, John Chalmers in Brussels and Susanna Twidale in London, Christoph Steitz in Frankfurt editing by Barbara Lewis) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---