G7 nations reject Vladimir Putin’s demand to pay for Russian energy in roubles

The Group of Seven major economies have agreed to reject Moscow’s demand to pay for energy imports from Russia in roubles, Germany’s energy minister said on Monday.

Robert Habeck told reporters that “all G-7 ministers agreed completely that this (would be) a one-sided and clear breach of the existing contracts.”

Habeck said that “payment in rouble is not acceptable and we will urge the companies affected not to follow (Russian President Vladimir) Putin’s demand”.

Putin announced last week that Russia will demand “unfriendly” countries pay for natural gas only in Russian currency from now on. He instructed the country’s central bank to work out a procedure for natural gas buyers to acquire roubles in Russia.

Economists said the move appeared designed to try to support the rouble, which has collapsed against other currencies since Putin invaded Ukraine on February 24 and Western countries responded with far-reaching sanctions against Moscow.

But some analysts expressed doubt that it would work.

Asked by reporters earlier on Monday if Russia could cut natural gas supplies to European customers if they reject the demand to pay in roubles, Kremlin spokesman Dmitry Peskov said in a conference call that “we clearly aren’t going to supply gas for free”.

“In our situation, it’s hardly possible and feasible to engage in charity for Europe,” Peskov said.

The G-7 nations are France, Germany, Italy, Japan, the United States, the United Kingdom and Canada.