The EC guidance on the Russian ‘gas for rubles’ decree: all things to all people?
On 21 April 2022, the European Commission published its guidance for EU Member States and their gas buyers on the Russian Presidential decree, which requested payment for Russian (pipeline) gas, delivered after 1 April 2022, in rubles. The decree and its implications for gas supply contracts have been analysed in a previous OIES publication. This comment analyses the guidance to understand what impact it might have on buyers’ decisions in respect of the new payment mechanism. The comment argues that although the guidance does not deliver any solutions for the buyers, it allows them to choose their own ways of following the new mechanism. It provides alternatives for those buyers who may consider the new mechanism compatible with their LTSCs and be ready to accept. It also provides alternatives for those buyers who wish to argue that the new mechanism goes beyond their contractual obligations, seeing it as an opportunity for suspending or terminating their LTSCs ahead of their expiry and removing a contractual constraint on their ability to eliminate their dependence on Russian gas, albeit with the risk that their supplies may be immediately cut off. Should the guidance be amended to exclude the alternative allowing buyers to accept the new procedure by declaring it being in breach of the EU sanctions regime, the risk of supplies being cut off for all buyers would increase sharply.