Gazprom PJSC has sent a letter to its European customers trying to reassure them that they can continue to pay for gas without violating sanctions, the latest indication that Russia may be trying to find a way to continue the flow of gas.
European companies are trying to find a way to continue buying Russian gas after Moscow demanded that payments be made in rubles, and the European Commission said such a move would violate sanctions. Poland and Bulgaria have already been cut and other countries’ payment deadlines expire later this month.
In a letter seen by Bloomberg, Gazprom told its customers that a new order issued by the Kremlin on May 4 “clarifies the procedure” set out in the original ruble payment decree.
It is unclear whether the new decree will be enough to allay the concerns of the European Union, which has said the creation of a ruble account and the deal with the central bank would violate sanctions. The EU did not comment.
The new order states that foreign currency received from buyers must be exchanged for rubles through accounts at the National Liquidation Center of Russia.
Gazprom said in the letter that the order ensures the transparency of cash flows from foreign buyers and excludes the possibility of any “third party” being involved in the arrangements. The procedure, as defined, seems to exclude the central bank to which sanctions have been imposed.
Gazprom did not immediately respond to a request for comment by Bloomberg.
President Vladimir Putin has confused gas markets and policymakers when he demanded that gas be paid for in rubles. Poland and Bulgaria were the first to be cut because they refused to commit to the new terms, but several European companies continue to seek detours, seeking guidance from the European Commission on what is allowed. The EU issued some guidelines on 22 April and promised to respond to companies’ requests for more clarity.
Russia has asked companies to open two accounts – one in euros and one in rubles – and has stated that payment will not be settled until the rubles arrive. The EU has said it gives too much power to Moscow and violates sanctions imposed on the central bank. The EU is urging companies to pay in euros and ask the Russian side to confirm that the transaction ends there.
In late April, Russia’s central bank issued its own clarification of Putin’s original mandate. The Bank of Russia said that if foreign buyers of gas paid into their foreign currency accounts in good faith, gas would not be cut off even if Gazprombank failed to convert those funds into rubles, provided the delay was not due to sanctions. .
Separately, Governor Elvira Nabiullina announced that the mechanism also reduces the period for converting euros and dollars into rubles to two working days, in an effort to allay EU concerns that foreign currency funds could eventually be considered as loan to the central bank.
Source: Capital
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