Russia and Vladimir Putin could soon 'turn the tap' on gas delivered to Europe as tensions rise between the Kremlin and the rest.
Putin last week ordered that "unfriendly" nations would have to pay in roubles for Russian gas, boosting the currency from an all-time low. When asked if Russia would cut gas supplies to the rest of Europe, Kremlin spokesman Dmitry Peskov said in a conference call that “we clearly aren’t going to supply gas for free”.
Currently Russia supplies about 40 per cent of Europe’s gas needs.
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Mr Peskov added: "No one will supply gas for free, it is simply impossible, and you can pay for it only in roubles."
G7 countries urged companies not to agree to rouble payments and said most supply contracts stipulated euros or dollars. Putin's demand has stoked fears in Germany, Europe's top economy that is heavily reliant on Russian gas, about potential disruptions and the impact on industries and households should utilities fail to pay in roubles.
EU commissioner Mairéad McGuinness labelled Mr Putin’s demand “a stunt” ahead of EU, G7 and Nato meetings.
Ms McGuinness aded: "While clever, I’m not convinced it’s such a strategic move by Putin. Why did he wait a month? I see it more as a defensive move, because sanctions are hitting the central bank’s reserves hard."
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