Kremlin says Russia will not supply gas to Europe for free as tensions rise over method of payment

The Kremlin says Russia will not supply gas to Europe for free as Moscow is at odds with the West over the method of payment, more than a month after Russia began a military operation in neighboring Ukraine.

“We are not going to supply gas for free, this is clear,” Kremlin spokesman Dmitry Peskov said at a press conference on Monday.

“In our situation, this is hardly possible and appropriate to engage in charity (with European customers),” he added, as Moscow currently works out methods for accepting payments for its gas exports in rubles.

Energy ministers from member states of the Group of Seven industrialized nations (G7) rejected the demand, said Germany Economy and Climate Protection Minister Robert Habeck after talks with his counterparts.

“All G7 ministers have agreed that this is a unilateral and clear breach of existing contracts,” he told reporters after holding a virtual conference with G7 energy ministers.

The ministers “underlined once again that the concluded contracts are valid and the companies should and must respect them … payment in rubles is unacceptable, and we call on the companies concerned not to comply with Putin’s demand,” he added.

On Friday, leaders of the European Union failed to reach a common ground on Russia’s demand made days earlier that “unfriendly” countries must pay in rubles, not euros, for its gas.

After Moscow launched a military operation in Ukraine on February 24, the US and its European allies began imposing waves of unprecedented sanctions against Russia, prompting the Kremlin to make the demand.

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Until the end of this month, the Russian central bank, the government and Gazprom, which accounts for 40 percent of European gas imports, should present their proposals for rubles gas payments to Russian President Vladimir Putin.

Peskov further said that Moscowwould take decisions in due course should European countries refuse to pay in the Russian currency.

Dutch and British wholesale gas prices rose by up to 20 percent on Monday on concerns about Russian gas supply.

The European bloc aims to cut its dependency on Russian gas by two-thirds this year and stop imports of Russian fossil fuel by 2027. Russian gas exports to the EU were around 155 billion cubic meters (bcm) last year.

Last week, the US said that it would work to supply 15 bcm of liquefied natural gas (LNG) to the EU this year.

Separately on Monday, Russian lawmaker Ivan Abramov warnedthat rejection of Moscow’s proposal to pay in rubles for Russian gas by G7 would lead to an unequivocal halt in supplies.

Abramov sits on the economic policy committee of the Federation Council, the Russian parliament’s upper chamber.

According to experts, the European blocwill struggle to replace all Russian gas exports in a short period of time.

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