Source: Bloomberg News
March 30, 2022, 4:17 AM EDT | Updated on March 30, 2022, 6:31 AM EDT
Russia may expand the list of commodities for which it demands payment in rubles to include grain,oil, metals and others, raising the stakes after President Vladimir Putin last week said Moscow willrequire European buyers of its gas to use the Russian currency.
Vyacheslav Volodin, speaker of the lower house of parliament, suggested the move in a Telegram postWednesday, describing it as a good way for Russia to retaliate against western sanctions imposed overits invasion of Ukraine. He didn’t specify how or when the shift might be mandated.
“It would be right to expand the list of goods to be exported for rubles where it’s beneficial for ourcountry: fertilizers, grain, vegetable oil, crude oil, coal, metals, timber, etc.,” Volodin wrote.
After the U.S. and its allies imposed harsh sanctions over the invasion, Putin last week ordered thestate gas giant to charge clients from countries Russia designated as “unfriendly” – a group thatincludes its major customers in Europe – rubles, instead of the euros and dollars currently used.Energy ministers from the Group of Seven nations rejected that demand, which officials say violatescontract terms.
No Details
Kremlin spokesman Dmitry Peskov said the new payment scheme for gas would take time toimplement, despite a March 31 deadline in a presidential order for officials to come up with amechanism to implement it.
He said Volodin’s proposal to expand the list of commodities sold for rubles should be worked on, butdidn’t indicate any time frame for possibly putting it into force.
Facing mounting challenges in supplying key staples like wheat amid the war in Ukraine, Russian grainexporters are ready to switch to ruble payments for their cargoes, according to an industry group.
Customers are willing to work with any currency, Eduard Zernin, head of the Russian Union of GrainExporters, said Wednesday by email. Despite the humanitarian status of such products, there areserious restrictions on logistics, insurance and payment for Russian grain, he said.
The grain group has asked the country’s central bank to help minimize losses for exporters andprevent the suspension of grain shipments to countries in need, Zernin said. The move was firstreported by Kommersant.
Germany triggered an emergency plan to brace for a potential Russian gas cut-offamid the ruble-payment demand, Economy Minister Robert Habeck said Wednesday.
“This is about monitoring the situation,” Habeck said at a press conference. “There are two moresteps, the alarm and the emergency phase, but we are not there yet. The situation would have toworsen dramatically before we reach those stages. We would then practically need a change in thesupply lines and would have to react accordingly.”
Benchmark gas futures traded in the Netherlands jumped more than 13% following the announcementfrom Germany. For now, supplies from Gazprom through key pipeline routes, which cover about athird of gas demand in Europe, continue uninterrupted.
— With assistance by Megan Durisin
(Updates with Kremlin spokesman from fifth paragraph)
- Proposal from top legislator follows Putin order on gas
- Grain industry ready to use any currency, industry group says
