31 Mar 2022 | 14:08 UTC
Putin signs order on new ruble payment mechanism to come into force April 1
Highlights
'Unfriendly' countries that refuse ruble payments for gas will have supplies suspended
Russian President Vladimir Putin signed an order March 31 prohibiting supply of Russian gas to countries that have sanctioned Russia over its invasion of Ukraine, if they refuse to pay for supplies in rubles.
The order comes into force from April 1. The text of the order was published in a Kremlin statement.
The new legislation has caused concern about security of supplies in recent days, with Western countries insisting that they will continue to pay for Russian gas in euros or dollars.
German and Italian officials said March 30 that they will still be able to pay for supplies in euros. Russia moved to switch currencies in contracts when Western sanctions restricted Russian access to the global financial system.
The order stipulates that when buyers from "unfriendly" countries pay for Russian gas, they should transfer forex to a Russian bank, which will then use it to buy rubles. Gazprombank, which has not been sanctioned, will process the transactions.
Germany and Italy are the two biggest markets for Russian pipeline gas in the EU, with imports of 46 Bcm and 21 Bcm, respectively, in 2020.
Related infographic: Russian invasion of Ukraine puts spotlight on security of oil, gas and commodities flows
