War in Ukraine: EU refuses to pay for gas in rubles and prepares break with Moscow

Moscow’s requirement to pay for purchases in rubles is “a unilateral and unjustified modification of treaties and it is legitimate to refuse”said Energy Commissioner Kadri Simson.

“97% of contracts (signed by European companies) indicate the currency for payment and it is either the euro or the US dollar”she clarified.

Kadri Simson said he had no idea about opening ruble accounts. “Payments are scheduled for mid-May and the majority of companies will comply with contract rules.”she assured.

French Minister for Ecological Transition Barbara Pompili, chair of the meeting, confirmed this “Willingness to honor contracts”.

“No immediate risks”

“We have to be prepared for a supply interruption”, warned the EU Commissioner. Several Member States have asked for clarification of payment in rubles by opening a special account and Kadri Simson has agreed to do so “detailed details to tell companies what they can and can’t do”.

Poland and Bulgaria paid for their purchases in the currency stipulated in their contracts with Russian gas giant Gazprom and refused to open a second ruble account. The Russian gas company retaliated by shutting down supplies after payment had not been made.

“There are no immediate supply risks”assured the commissioner. “But we will not be able to replace the 150 billion cubic meters of gas we get from Russia with other sources. It’s not sustainable.” she confirmed. “We can cope with replacing 2/3 of Russian gas supplies”she clarified.

independence

Kadri Simson stressed that member states need to replenish their reserves and Barbara Pompili stressed the need “Diversify the type of electricity and heat generation”.

“Europe needs to get rid of dependence on Russian fossil fuels”said Polish Minister Anna Moskwa. “Our reserves will be 100% utilized for this winter”she assured.

“American LNG has started arriving via Lithuania and we will ship gas from Norway via Denmark.”she explained.

Finalization of the oil embargo

Ministers also exchanged views on an EU plan to phase out purchases of Russian oil and petroleum products in order to dry up European funding for the Kremlin-led war in Ukraine. But no decision has been made yet.

“A new package of sanctions is being prepared, but that was not the subject of the meeting,” said Barbara Pompili. “We are working on a new sanctions package”confirmed Commissioner Simson.

“A meeting of the college (all commissioners, editor’s note) will take place in Strasbourg on Tuesday”on the fringes of the session of Parliament, “and President Ursula von der Leyen will clarify what has been decided”, she hinted.

The suggestion is “Concluded and will be adopted by the Commission on Tuesday‘ told AFP a European source. “I think the Commission will propose a 6th package of sanctions tomorrow (Tuesday), including the withdrawal of Russian oil.”said Federal Minister Robert Habeck.

The proposal will be submitted to member states for adoption on Wednesday. “I don’t know if it will be possible by the weekend”said the German minister however.

If the 27 agree on this measure, the purchase of oil and petroleum products from Russia will be phased out over six to eight months, but with measures effective immediately, notably a tax on the transport of tankers, a European official said.

The EU has already imposed an embargo on Russian coal and closed its ports to Russian ships, except for transporting hydrocarbons. The main importers of fossil fuels from Russia (gas, crude oil, petroleum products and coal) are Germany, Italy, the Netherlands and France.

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