Belarus, Moscow's longtime ally, agrees to pay for Russian gas and oil in rubles

Belarus, a staunch Russian ally, on Tuesday, said that it will pay for the Russian oil and gas imports in rubles in 2022 as it is “crucial” for Moscow’s economy which has been battered due to coordinated Western sanctions. In a televised interview with the Belarus-1 channel, Belarusian Prime Minister Roman Golovchenko informed, “We have switched to settlements in rubles for energy. It is crucial. It is what we had been seeking for so long, that is not to make payments in dollars.” He continued that Belarus will be making full arrangements and will be switching contracts to pay for the gas with the Russian ruble. 

“It is not because Russia is demanding from the West now, which is absolutely fair, to make settlements in its national currency," Golovchenko said in televised remarks. 

Russian President Vladimir Putin also announced at a state conference that Moscow will offer Belarus to continue with the existing terms of the contracts until the end of 2022. "We will leave the price for Belarus for next year, 2022, unchanged. The price for Belarus is $128.5/1,000 cu m. If you don't know, I would like to inform you that the price on the European market is $650/1,000 cu m," Putin said at a joint press conference, according to a transcript on the Kremlin website.

Ruble payment 'economically profitable for us': Belarus 

Paying in Russian rubles for the energy import is in fact “economically profitable for us”, said Golovchenko, adding that the Belarusian regime has “always fought for it.” ”This year we will be paying for oil and gas imports in Russian rubles,” furthermore he confirmed. Belarusian leader cited the sectoral programs struck between the two ally and neighbouring nations, which he iterated have made “noticeable progress towards a unified procedure of energy pricing for economic entities of Belarus and Russia.” He stressed that these aren’t the deals worth hundreds of millions of dollars but billions of dollars, and paying in Ruble will benefit its ally Russia. 

“Half of the problem is solved this year, it will be fully resolved when we, according to the plan, will ink an agreement on forming a unified oil and gas market," Golovchenko informed. He also categorically iterated that the financial order is being reshuffled globally and it was time to stop paying for commodities in US dollars or Euros.

“In my view, it can be branded as the period of the suicide of the dollar,” Belarusian Prime Minister Roman Golovchenko asserted. He went on to explain that the “reverberations of the US aggressive and unjustified actions are hard to foresee. It is a chance for the world to break away from the hegemony of the dollar.” 

Russia President Vladimir Putin had signed a decree that mandated the "unfriendly countries" to set up a special account in the Russian Central Bank to pay for their gas supplies in the Rubles. The move is a method to cope with the depreciation of the Ruble in the face of coordinated international sanctions that the western countries imposed in retaliation to Moscow's invasion of Ukraine. Putin asked the EU to open special "K-accounts" to transfer their payments which will then be converted to Ruble.

A payment facility will be set up in consultation with Russia's Gazprombank, a subsidiary of state energy giant Gazprom. EU has largely been boycotting such a decision citing the previous contracts that mention dollars and Euro as the mode of payment. President Putin, however, emphasized that the countries refusing to use the payment mechanism will breach contracts and will see "corresponding repercussions."