Payment Terms

In rupture with the EU, Hungary says it is ready to pay for Russian gas in rubles

  • Russia demanded gas payments in rubles
  • The European Commission has asked countries to stick to the original contracts
  • Hungary says EU has no role to play in bilateral deals
  • EU under pressure to tighten sanctions on Russia

BUDAPEST/LONDON, April 6 (Reuters) – Hungary said on Wednesday it was ready to pay rubles for Russian gas, breaking ranks with the European Union which has sought a united front to oppose the request from Moscow for payment in the currency.

Hungary will pay for shipments in rubles if requested by Russia, Prime Minister Viktor Orban told a news conference on Wednesday in response to a question from Reuters.

Russian President Vladimir Putin has warned Europe it risks having its gas supply cut off unless it pays in rubles as he seeks revenge against Western sanctions for the invasion of Russia. Ukraine by Moscow.

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With invoices due weeks away, the European Commission said those with contracts requiring payment in euros or dollars should stick to that. Read more

Hungarian Foreign Minister Peter Szijjarto said earlier that EU authorities had “no role” to play in his gas supply deal with Russia, which was based on a bilateral contract between units of the Hungarian public company MVM and Gazprom.

The European Commission does not comment on statements by national authorities, a spokesperson said.

Hungary was one of the few EU member states to reject energy sanctions against Moscow in response to the invasion, which Russia calls a “special military operation”.

Orban, whose government has enjoyed close business ties with Moscow for more than a decade, swept to power for a fourth straight term in Sunday’s election, in part on a promise to preserve the security of gas supplies to Hungarian households.

DEPENDENT ON RUSSIAN GAS

While Putin’s request has raised concerns in many European capitals, his governments – which on average depend on Russia for more than a third of their gas – are discussing the issue with energy companies.

On Monday, Slovakia said it would act in unison with the EU, while Poland’s dominant gas company PGNiG said its original contract with Gazprom, which expires at the end of this year, binds the two parties.

Gas pipelines are seen at a gas distribution center near the Serbian border in Kiskundorozsma, Hungary, September 28, 2021. REUTERS/Bernadett Szabo

Austria’s OMV (OMVV.VI) and Russia’s Gazprom (GAZP.MM) had initial contact over paying for the gas in roubles, an OMV spokesman said on Friday, although the Vienna government said that there was no basis of payment in another currency. only euros or dollars. Read more

Ukraine’s foreign minister has insisted an embargo on Russian gas and oil is needed, but the European Union has so far stalled, while preparing to propose a ban on imports of Russian gas and oil. coal and other products. Read more

European buyers are increasing coal shipments from around the world amid a proposed EU ban on Russian imports and a scramble to relieve gas supplies, according to data and shipping sources. Read more

The intention of the European Commission “that there be some sort of common response from countries importing Russian gas” was not considered necessary, said Hungarian Szijjarto, adding that the nations had individually signed bilateral contracts.

“And… no one has a say in how we change our own contract.”

Hungary, which relies heavily on Russian gas and oil imports, signed a new long-term gas supply agreement last year under which Gazprom is expected to ship 4.5 billion cubic meters of gas annually.

Meanwhile, Putin discussed expanding Moscow’s economic cooperation with Belgrade, including in the energy sector, with his Serbian counterpart Aleksandar Vucic. Read more

Serbia’s contract for Russian gas expires on May 31. “Discussions over the new contract should be initiated as soon as possible,” a statement from Vucic’s office read.

Latvia’s biggest gas trader, which is a third-party owned by Gazprom, said it was considering paying in euros or rubles for Russian gas, but a Latvian foreign ministry spokesman said: ” Latvia does not support payment in rubles and there must be a common EU approach.”

Lithuania said it would no longer import Russian gas to meet its domestic needs, becoming the first country in Europe to gain independence from Russian supplies.

Deliveries of Russian gas to Europe via three key pipeline routes were broadly flat on Wednesday.

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Reporting by Krisztina Than and Gergely Szakacs; additional reporting by Marek Strzelecki, Ivana Sekularac, Andrius Sytas and Kate Abnett; written by Nina Chestney; edited by Jason Neely, John Stonestreet and David Evans

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