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ENERGY

Italy rejects Russian demand for gas payment in rubles

Paying for Russian gas in rubles would be unacceptable, G7 countries reiterated on Monday, as the heads of Italy's major energy firms confirmed that they won't be meeting the Russian president's demand.

Italy rejects Russian demand for gas payment in rubles
Italy is a key export market for Russian energy giant Gazprom. Photo by Kirill KUDRYAVTSEV / AFP)

The CEO of Italian energy giant Eni, Claudio Descalzi, also said on Monday that his company would not comply with the demand by Russia that “hostile countries”, including Italy, pay their energy bills using the Russian ruble, instead of euros or dollars,

“Eni will not pay for Russian gas in rubles,” Bloomberg quoted Descalzi as telling a panel discussion in Dubai.

“Eni doesn’t have rubles,” he said. “The contracts say fuel payments should be made in euros”.

READ ALSO: Italy announces plan to end reliance on Russian gas by 2025

Russia’s demand is “not acceptable”, read a statement issued on behalf of the G7 by Germany’s government on Monday.

‘All G7 ministers agreed that this is a clear unilateral breach of existing contracts,” 

Russian President Vladimir Putin ordered the country’s government, Russia’s Central Bank, and energy firm Gazprom to require payments for gas to be made in rubles as of March 31st, as he hit back at Western countries which have imposed sanctions on Russia following its invasion of Ukraine.

The demand would be particularly problematic for Italy, which is heavily reliant on imported gas – around half of which is currently supplied by Russia.

German Economy Minister Robert Habeck on Monday told reporters that “we must interpret this demand as Putin having his back against the wall,” following a virtual meeting with his G7 counterparts.

The club consists of Britain, Canada, France, Germany, Italy, Japan and the United States, with Germany currently holding the presidency.

French President Emmanuel Macron had already rejected Putin’s gas-for-rubles demand on Friday.

The Russian move “is not in line with what was signed, and I do not see why we would apply it,” Macron said.

Like other European countries, Italy says it is planning to reduce its heavy reliance on Russian energy imports in the wake of the Ukraine war.

But the Italian government has so far resisted calls to boycott Russian oil and gas entirely.

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ENERGY

Italian energy company to start paying for Russian gas in rubles

Italian energy company Eni confirmed it is opening accounts in rubles with Gazprombank to pay for gas supplies, complying with Moscow's demands.

Italian energy company to start paying for Russian gas in rubles

Eni said in a statement on Tuesday it was opening accounts in rubles and euros with Gazprom Bank “on a precautionary basis” as “deadlines for the payment of gas supplies are scheduled for the next few days”.

It was not immediately clear whether the move would fall foul of European Union sanctions, although Eni said it was “not incompatible”.

The company said its decision to open the accounts was “taken in compliance with the current international sanctions framework” and that Italian authorities had been informed.

READ ALSO: Italy will ‘soon’ stop buying gas from Russia, says minister

Vladimir Putin demanded at the end of March that payment be made in rubles or the gas supply to European countries would be cut off, as he hit back at sanctions placed on Russia by EU countries following its invasion of Ukraine.
 
Eni’s CEO Claudio Descalzi said at the time that his company would not comply with the demands, saying “Eni doesn’t have rubles” and “the contracts say fuel payments should be made in euros”.
 
But many European companies and their lawyers have since been looking at ways to meet the demand without breaching sanctions aimed at punishing Russia for the war in Ukraine, reports Bloomberg.
 
EU officials had said opening a ruble account would breach sanctions. But its latest guidelines, to be published this week, are expected to stop short of banning bank accounts in rubles and  therefore allow companies to keep buying Russian gas, Bloomberg reports.
 
 
Like other European countries, Italy says it is working to reduce its heavy reliance on Russian energy imports in the wake of the Ukraine war.
 

But the Italian government has so far resisted calls to boycott Russian oil and gas.

Italy is highly dependent on Russian gas, importing 95 percent of the gas it consumes, of which around 40 percent comes from Russia.

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