Hungary sets up mechanism to pay for Russian gas with rubles

Hungary plans to modify its natural gas contract with Russian energy company Gazprom in order to satisfy a demand by President Vladimir Putin that Russian gas be paid for in rubles.

Hungarian Foreign Minister Peter Szijjarto tells a news conference that the subsidiary of Hungary’s energy group MVM, CEE Energy, would pay its gas bills in euros to Russia’s Gazprombank, which would convert the payments into rubles and transfer them to the gas provider Gazprom Export.

Putin, in retaliation over sanctions against Russia by the European Union, has demanded that countries pay for Russian gas in rubles or risk having their supply shut off.

While Hungary has voted with the European Union on most sanctions against Russia, it has lobbied heavily against blocking Russian energy imports, arguing that would cripple its economy.

Szijjarto said that modifying Hungary’s contract with Gazprom ensured the country’s energy supply while staying in line with the EU’s sanctioning policy.