EU comes to the crunch over Russia’s demands to pay roubles for gas

Europe is facing a crunch point in mid-May when EU member states will have to reject Moscow's demands for fuel payments to be made in roubles - despite being without alternative gas supply, Brussels has warned.

Kadri Simson, the European commissioner for energy, said on Monday that the Kremlin's demands had to be rebuffed despite the risks of an interruption to supply at a time that the shortfall cannot be made good.

Last week, Gazprom suspended its gas flow to Poland and Bulgaria and threatened the supply of others if they should follow Warsaw and Sofia in failing to pay for fuel in the Russian currency.

After a meeting of EU energy ministers, Simson said that all the energy ministers had accepted that paying in roubles through the mechanism set out by Russia would breach sanctions imposed by the bloc after Russia's invasion of Ukraine.

She added that she had not heard of any European energy company that was preparing to comply with Moscow despite suggestions to the contrary from Gazprom and firms such as MOL of Hungary.

Simson said: "Many European energy companies are due to make the next payment to Gazprom in mid-May and are trying to understand better what they should do and we need to give them the clarity that paying in roubles through the conversion mechanism managed by the Russian public authorities and a second dedicated account at Gazprom bank is a violation of the sanctions and cannot be accepted."

In 2021, the EU imported 155bn cubic metres of natural gas from Russia, accounting for about 45% of EU gas imports and close to 40% of its total gas consumption.

In the last year, this dependency has been reduced but the reliance on Russian fossil fuel remains so high that there is no alternative that could fully compensate for its loss.

It is understood that the next major date for payments for gas by European energy companies is 20 May.

The potential standoff comes as the EU considers phasing in a ban on Russian oil, a move that Germany's economy minister, Robert Habeck, said on Monday would lead to a major economic hit and higher prices for consumers.

Habeck said Germany was not opposed to such a ban but he warned that Europeans needed to be prepared for the consequences and that some countries would be hit harder than others.

He said: "We will be harming ourselves, that much is clear. It's inconceivable that sanctions won't have consequences for our own economy and for prices in our countries.

"We as Europeans are prepared to bear [the economic strain] in order to help Ukraine. But there's no way this won't come at a cost to us."

Under the draft sixth round of sanctions to be discussed by EU ambassadors on Wednesday, a ban on the import of Russian oil would be enacted by the end of the year, although Hungary has said it could block the proposal if alternatives are not successfully found.

Anna Moskwa, Poland's climate and environment minister, said Warsaw, which has been investing heavily in liquefied natural gas terminals, would be prepared to help any EU country that needed alternatives to Russian fossil fuels.

She said: "We will call for immediate sanctions on Russian oil and gas. This is the next, and urgent, and absolute step. We already have coal. Now it's time for oil, and [the] second step is for gas. The best option is take them all together."