Putin demands payment in roubles for Russian gas supplies or contracts will be ‘stopped’

Russian President Vladimir Putin has said that, from tomorrow, countries buying gas from Russia must pay in roubles or their contracts will not be honoured.

In a televised statement on Thursday, Mr Putin said he had signed a decree to that effect, adding that the switch to roubles was designed to “strengthen our sovereignty” and protect Russian jobs.

But the move was rejected by European capitals, with Berlin saying it amounted to “blackmail”.

Mr Putin said: “In order to purchase Russian natural gas, they must open rouble accounts in Russian banks. It is from these accounts that payments will be made for gas delivered starting from tomorrow.

“If such payments are not made, we will consider this a default on the part of buyers, with all the ensuing consequences.”

He added: “Nobody sells us anything for free, and we are not going to do charity either – that is, existing contracts will be stopped.”

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Existing contracts will be honoured, however, provided customers follow the new rules, he went on.

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Russia supplies about a third of Europe’s gas and if Moscow decided to cut off existing flows, it could plunge the continent into a full-blown energy crisis.

France’s economy minister Bruno Le Maire said France and Germany were preparing for just such a scenario.

And Boris Johnson’s spokesman said paying for the UK’s Russian gas in roubles was “not something we will be looking to do”.

Western companies and governments have rejected the move as a breach of existing contracts, which are set in euros or dollars.

German Chancellor Olaf Scholz said he had told his Russian counterpart that his country will keep paying for its gas supplies in those currencies.

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Germany, the most heavily reliant on Russia, has already activated an emergency plan that could lead to rationing in Europe’s biggest economy.

Its economy minister, Robert Habeck, said Western allies are determined to not be “blackmailed” by Moscow, calling the move an attempt to divide them over energy supplies, which “has failed”.

Both Germany and Poland are aiming to stop using Russian energy by the end of the year, their leaders have said.

Mr Putin is believed to have been surprised at the strength and breadth of western sanctions imposed after the invasion of Ukraine.

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He told his audience that the US was profiting from the global instability, adding that the post-Ukraine sanctions “had been prepared beforehand”, and warning the West will try to find new reasons for further measures.

The rouble fell to historic lows after Russia invaded Ukraine on 24 February, but has since recovered.

Washington responded to Mr Putin’s statement by adding a further 13 people and 21 entities, including Russia’s largest manufacturer of microelectronics, to the list of those under sanction.

Thursday’s move also targeted “malicious cyber actors,” the US Treasury said.