The Kremlin said that the decree on Gazprom is not a response to the EU price ceiling

The decree of Russian President Vladimir Putin on limiting purchase prices for Gazprom from foreign companies from unfriendly countries is not Russia’s response to the introduction of oil and gas price ceilings by the EU. This statement was made by the press secretary of the President of the Russian Federation Dmitry Peskov.

“This is a decision that is not connected with these European innovations. This is, in fact, a response to the actions of a number of unfriendly countries,” Peskov said.

The day before, December 22, Putin signed decree according to whichGazprom”and its affiliates cannot fulfill obligations to foreign companies that are associated with countries that commit unfriendly actions against the Russian Federation.

In particular, we are talking about a ban on purchases from a joint venture with Wintershall and OMV above the established price. Together with the German and Austrian companies, Gazprom is developing a number of sections of the Achimov deposits of the Urengoy oil and gas condensate field and the Yuzhno-Russkoye field.

The Cabinet of Ministers will set the maximum prices and tariffs within 10 days. Economic measures are applied retroactively – from March 1, 2022.

On the same day, Russian President Vladimir Putin announced signing a decree on retaliatory measures to introduce a price cap on Russian oil on 26 or 27 December. “You know, the decree, I think I will sign somewhere on Monday or Tuesday. These are preventive measures,” the head of state said.

On December 3, the EU countries agreed on a price ceiling for Russian oil of $60 per barrel. The document was published in the Official Journal of the EU on 4 December. The restriction came into force on December 5, along with a ban on the supply of Russian oil by sea to the EU countries. In addition to the EU countries, the G7 countries and Australia also joined the ceiling.

In addition, on December 19, EU countries agreed gas price limit of 180 euros per 1 MWh, which corresponds to $1975 per 1000 cubic meters. The ceiling will take effect from February 15, 2023. The ceiling will be activated if the gas price at the TTF gas hub in the Netherlands (the most liquid gas hub in the EU) exceeds the agreed level, and the spread to the price of liquefied natural gas (LNG) in the EU will be more than 35 euros per 1 MWh.

Earlier, the Kremlin has repeatedly stressed that Russia will not supply energy to countries that join the price ceiling.