LONDON: Russia’s top lawmaker warned the European Union on Wednesday that if it wanted Russian natural gas then it would have to pay in roubles, and cautioned that oil, grain, metals, fertiliser, coal and timber exports could also soon be priced the same way.
After the West imposed crippling sanctions on Russia in response to the invasion of Ukraine, Russian President Vladimir Putin demanded that natural gas exported to Europe or the United States should be paid for in his country’s currency.
Europe, which imports about 40% of its gas from Russia and pays mostly in euros, says Russia’s state-controlled gas giant Gazprom is not entitled to redraw contracts.
The G7 group of nations rejected Moscow’s demands this week. “European politicians need to stop the talk, stop trying to find some justification about why they cannot pay in roubles,” Vyacheslav Volodin, the speaker of the lower house of parliament, said in a post on Telegram.
“If you want gas, find roubles.” “Moreover, it would be right - where it is beneficial for our country - to widen the list of export products priced in roubles to include: fertiliser, grain, food oil, oil, coal, metals, timber etc.” If was not immediately clear whether such a move could become official Russian policy, though Putin, when announcing the rouble decision for natural gas, said it was only the start of the process.
Russian officials have repeatedly said the West’s attempt to isolate one of the world’s biggest producers of natural resources is an irrational act of self harm that will lead to soaring prices for consumers and tip the economies of Europe and the United States into recession.
Russia says the West’s sanctions - and in particular the freezing of about $300 billion in Russian central bank reserves - amount to a declaration of economic war.
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Putin says the freezing of central bank reserves was a default on the West’s obligations to Russia that would torpedo confidence in the US dollar and the euro.
“Through these sanctions, through your attempts to isolate us, you have isolated yourselves,” Volodin said. “They have done everything they could to undermine confidence in the US dollar and the euro so that Russia now refuses to settle in these currencies,” he said.