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Hungary confirms it will pay Russia for gas and oil imports in roubles

Von der Leyen warns that paying in roubles for gas to the Russian state is in breach of economic sanctions
Russian President Vladimir Putin (right) and Hungarian Prime Minister Viktor Orban hold a press conference during their meeting at the Kremlin in Moscow on 1 February 2022

AFP/YURI KOCHETKOV  -   Russian President Vladimir Putin (right) and Hungarian Prime Minister Viktor Orban hold a press conference during their meeting at the Kremlin in Moscow on 1 February 2022

Gas remains at the centre of the geopolitical chessboard between Russia and Europe. The latest move by the Russian giant Gazprom was to announce that it would cut off gas supplies to Poland and Bulgaria for refusing to pay in roubles. The EU's response has been blunt. "They must not accede to Russian demands. It would be a breach of sanctions and a high risk for business," said European Commission President Ursula von der Leyen.

Despite the warnings, Hungary has confirmed that it will pay Russia in roubles for gas and oil imports because of its heavy dependence on Russia. This was confirmed by Hungarian Foreign Minister Peter Szijjarto in an interview with US television network CNN in Budapest. Szijjarto stressed that "85% of gas and 65% of oil supplies" come from Russia.

The Russian government signed a decree establishing that payment for gas supplied to Europe must be paid exclusively in roubles from April onwards. Faced with this decision, the head of the EU executive has assured that there will be an "immediate, united and coordinated" response from the European Union. 

The reason for this refusal is that the Russian decision is not stipulated, since 97% of the gas supply contracts of the companies state that payment for gas must be made "explicitly" in euros or dollars. "Russia's request to pay in roubles is a unilateral decision and does not correspond to the contracts," Von der Leyen defended. However, she said that the energy ministers of the EU-27 will meet extraordinarily "as soon as possible" to seek solutions to this situation.

La presidenta de la Comisión Europea Ursula von der Leyen
AFP/JOHN THYS - The President of the European Commission Ursula von der Leyen

In addition to this firm response, the President of the European Commission announced that Europe is working "intensively" on the next package of sanctions against Russia, although she did not clarify the exact timetable or content of the coercive measures. In any case, what has been affirmed is that Europe is working to diversify gas supplies and reduce dependence on Russia. 

The British Prime Minister, Boris Johnson, has also joined in denouncing Russia's demands, asserting that Putin's "bullying behaviour" in what he considers to be "energy blackmail" cannot be allowed.

Meanwhile, the governments of Bulgaria and Poland have sent messages of reassurance on the confirmation of the Russian gas cut-off. The Polish Minister for Climate and Environment, Anna Moskwa, has assured that there is no need to look for new supplies because "the stock of gas stored in Poland is around 80%". The German minister also added that they have the Czech and Lithuanian interconnector, but that, for the time being, "supplies are secure".

Gasoducto ruso
AP/DMITRY LOVETSKY - Russian Gas Pipeline

For his part, Bulgarian Prime Minister Kiril Petkov confirmed that under no circumstances would the quantities of gas for private consumers in the Balkan country be reduced. As a solution, Petkov proposed a natural gas interconnector with Greece. 

The consequences of the gas supply cut were also discussed at this morning's meeting between the Spanish Prime Minister, Pedro Sánchez, and his Bulgarian counterpart, Rumen Radev. In this regard, Sánchez expressed Spain's "support and solidarity" in the face of "unacceptable blackmail by Russia". At the meeting, the Prime Minister was also interested in the effects of this decision, as well as the economic, humanitarian and security and defence consequences of the conflict in Ukraine.