Russian gas exports don’t need to be paid in rubles for now, says Kremlin

Russia will not immediately demand that buyers pay for its gas exports in rubles, the Kremlin said on Wednesday, promising a gradual shift and saying Russia should work on an idea to widen the list of its exports requiring ruble payment.

President Vladimir Putin issued an order last week for Russian gas, which accounts for 40% of European needs, to paid for in rubles instead of dollars or euros.

Earlier on Wednesday, Russia’s top lawmaker Vyacheslav Volodin said the European Union would have to pay in rubles if it wanted Russian gas and said oil, grain, metals, fertilizer, coal and timber exports could be priced the same way.

The government, the central bank and Gazprom are due to present proposals for the switch by Thursday.

Asked whether the payments should be in rubles starting from Thursday, Kremlin spokesman Dmitry Peskov said: “Absolutely no.”

“As we discussed before, payments and delivery is a time consuming process … This does not mean that a tomorrow’s delivery should be paid (in rubles). From a technological point of view, this is a more prolonged process,” he said.

Putin’s order to charge “unfriendly” countries in rubles for Russian gas boosted the Russian currency after it plunged to all-time lows when West imposed sweeping sanctions on Moscow for its invasion of Ukraine. European gas prices also rocketed up.

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The Russian demand has been rejected by European countries, which pay for Russian gas mostly in euros and say Russia is not entitled to redraw contracts, and by the G7 group of nations.

Commenting on the Russian ruble plan, Anatoly Aksakov, head of the financial committee in Russia’s lower house of parliament, said this week: “I believe we don’t have to change the law, it’s all stipulated there.””

“The foreign currency will be exchanged at a market rate, which will be set at the Moscow Exchange,” he said. “They can buy the rubles wherever.”