‘Find roubles’ if you want Russian oil, grain or metals, top lawmaker says

FILE PHOTO: Russian President Vladimir Putin meets with State Duma Speaker Vyacheslav Volodin, at the Novo-Ogaryovo state residence outside Moscow, Russia October 26, 2020. Sputnik/Alexei Druzhinin/Kremlin via REUTERS

March 30, 2022

By Guy Faulconbridge

LONDON (Reuters) -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.

Germany declared on Wednesday an “early warning” that it could be heading for a gas supply emergency and said the measure was designed to prepare for a possible disruption or stoppage of natural gas flows from Russia.

Russia this week said it would work out practical arrangements by Thursday for foreign companies to pay for gas in roubles.

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.

Putin says the freezing of central bank reserves was a default on the West’s obligations to Russia that would torpedo confidence in the U.S. dollar and the euro.

Former President Dmitry Medvedev said that West’s sanction had “boomeranged” back to undermine the economies of Europe and North America, driving up prices for fuel and heating and undermining confidence in the dollar and euro.

“The world is waking up: confidence in reserve currencies is melting like a morning fog,” Medvedev said. “Abandoning the dollar and the euro as the world’s main reserves no longer looks like a fantasy.”

Medvedev said “crazy politicians” in the West had sacrificed the money of their taxpayers on the altar of an unknown victory in Ukraine. “The era of regional currencies is coming.”

Russia has long sought to reduce dependence on the U.S. dollar, though its main exports – oil, gas and metals – are priced in dollars on global markets.

Globally, the dollar is by far the most traded currency, followed by the euro, yen and British pound.

(Reporting by Guy Faulconbridge; Editing by Conor Humphries and Frank Jack Daniel)

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