President Putin's Ruble 'Threat' Quips, United States: Indication Of Russia's Economic Troubles

US State Department spokesman Ned Price. (Wikimedia Commons/US Department of State)

JAKARTA - US State Department spokesman Ned Price said Russian President Vladimir Putin's 'threat' to cut off gas supplies if foreign buyers did not use the ruble was a sign of Moscow's economic and financial 'desperation' caused by Western sanctions over the invasion of Ukraine. .

President Putin announced in a televised address that from today foreign buyers of Russian gas must pay for it in rubles, or the supply will be cut off.

European countries, some of which rely heavily on Russian gas, have rejected the request with the German government saying it amounted to "extortion."

"I think basically this is just another indication of Russia's economic predicament," Price told reporters at a regular news conference.

He added that it was up to European countries to determine their response regarding President Putin's threats.

Sanctions, export controls and other economic measures imposed in response to the February 24 invasion of Ukraine, had a "significant, substantial, profound effect" and caused "economic and financial despair" on Russia's part, Price said.

As previously reported, Russian President Vladimir Putin stressed that foreign buyers would have to pay for Russian gas in rubles from Friday or the supply would be cut. President Putin's decision on Thursday leaves Europe facing the prospect of losing more than a third of its gas supply.

President Putin said buyers of Russian gas should open ruble accounts in Russian banks. It is from this account that payments will be made for gas deliveries starting tomorrow (today) or April 1.

"If the payment is not made, we will consider this a default on the part of the buyer, with all the ensuing consequences. Nobody is selling us anything for free, nor will we be doing charity work, i.e., existing contracts will be terminated," he said. .

Under the mechanism laid down by President Putin, foreign buyers will use a special account at Gazprombank to pay for gas. Gazprombank will buy rubles on behalf of gas buyers and transfer rubles to other accounts, the order said.