- Russia has demanded payments for gas in rubles
- The European Commission has asked countries to stick to the original treaties
- Hungary says the EU has no role in bilateral treaties
- The EU is under pressure to increase sanctions against Russia
BUDAPEST / LONDON, April 6 (Reuters) – Hungary said on Wednesday it was ready to pay rubles for Russian gas, breaking the ranking with the European Union seeking a united front in opposing Moscow’s demand for foreign currency.
Hungary will pay for shipments in rubles if Russia so requests, Prime Minister Viktor Orbán told a news conference on Wednesday in response to a Reuters question.
Russian President Vladimir Putin has warned Europe that it risks cutting off gas supplies unless it pays in rubles, as it seeks retaliation for Western sanctions on Moscow’s invasion of Ukraine.
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In the weeks leading up to the payment of the bills, the European Commission has said that those with contracts requiring payment in euros or dollars must adhere to this. Read more
Hungarian Foreign Minister Peter Siarto said earlier that EU authorities had “no role” in the gas supply agreement with Russia, which is based on a bilateral agreement between the Hungarian state MVM and Gazprom.
The European Commission has not commented on statements by national authorities, a spokesman said.
Hungary was one of the few EU member states to reject energy sanctions against Moscow in response to what Russia called an “special military operation”.
Orbán, whose government has maintained close business relations with Moscow for more than a decade, came to power for a fourth consecutive term in Sunday’s election, in part with a promise to maintain security of gas supplies to Hungarian households.
RELIABLE ON RUSSIAN GAS
While Putin’s request has caused problems in many European capitals, his governments – which on average rely 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 initial contract with Gazprom, which expires later this year, was binding on both countries.
Gas pipelines seen at a gas distribution center near the Serbian border in Kiskundorozma, Hungary, September 28, 2021. REUTERS / Bernadett Szabo
Austria’s OMV (OMVV.VI) and Russia’s Gazprom (GAZP.MM) had initial contact over gas payments in rubles, an OMV spokesman said on Friday, although the Vienna government said there was no reason to pay in a currency other than the euro. or dollars. Read more
Ukraine’s foreign minister has insisted on an embargo on Russian gas and oil, but the European Union has so far halted as it prepares to propose a ban on imports of coal and other products. Read more
European buyers are increasing coal supplies around the world amid the EU’s proposed ban on Russian imports and the fight to ease limited gas supplies, according to data and sources. Read more
The European Commission’s intention “there should be some common response from Russian gas-importing countries” is not considered necessary, Hungary’s Siarto said, adding that the countries have signed bilateral agreements individually.
“And no one has a word on how we change our own contract.”
Hungary, which relies heavily on Russian gas and oil imports, signed a new long-term gas supply deal last year, which Gazprom is expected to supply 4.5 billion cubic meters of gas a year.
Meanwhile, Putin discussed with Serbian counterpart Alexander Vucic expanding Moscow’s economic co-operation with Belgrade, including in the energy sector. Read more
Serbia’s Russian gas agreement expires on May 31st. “Talks on the new contract must begin as soon as possible,” Vucic’s office said in a statement.
Latvia’s largest gas trader, which is Gazprom’s third owner, said it was considering whether to pay in euros or rubles for Russian gas, but a Latvian Foreign Ministry spokesman said: “Latvia does not support the payment in rubles and should there is a common EU approach. “
Lithuania has said it will no longer import Russian gas to meet its domestic needs, becoming the first country in Europe to secure its independence from Russian supplies.
Russian gas supplies to Europe via three key pipeline routes were broadly stable on Wednesday.
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Report by Krisztina Than and Gergely Szakacs; additional reports by Marek Strzelecki, Ivana Sekularac, Andrius Sitas and Kate Abnet; writing by Nina Honest; edited by Jason Neely, John Stone Street and David Evans
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