India breaks from G7 with pledge to keep buying Russia oil

India's Petroleum Minister discusses buying Russian oil and gas

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India’s Energy minister has broken ranks with other G7 governments over energy sanctions, saying Delhi will continue to source energy from Russia. Hardeep Singh Puri has argued that his first moral duty is to provide Indian consumers and ensure the pumps do not run dry.

Mr Singh Puri told CNBC: “Russia accounted if memory serves me right towards the end of the financial year, which ended 31 March 2020 to 0.2 per cent that’s all we had.

“Then when the thing started so somebody said India’s buying a lot of oil from Russia, I said the Europeans buy more than one afternoon than I do in a quarter. I’d be surprised if that is not the condition still, but yes, we will buy from Russia.

“We will buy from wherever, a democratically elected government…I have a moral duty to my consumer.”

“Why does a democratically elected government want a situation where the petrol pump runs dry look at what’s happening in countries around India.”

Russia’s Gazprom said on Tuesday it had signed an agreement to start switching payments for gas supplies to China to yuan and roubles instead of dollars.

The shift is part of a push by Russia to reduce its reliance on the US dollar, euro and other hard currencies in its banking system and for trade – a drive that Moscow has accelerated since it was hit with Western sanctions in response to its invasion of Ukraine.

Russia has been forging closer economic ties with China and other non-Western countries, in particular as new markets for its vital hydrocarbon exports.

Gazprom CEO Alexei Miller said allowing for payments in Russian roubles and Chinese yuan was “mutually beneficial” for both Gazprom and Beijing’s state-owned China National Petroleum Corporation.

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“It will simplify the calculations, become an excellent example for other companies and give an additional impetus for the development of our economies,” he said.

Gazprom did not provide further details on the scheme or say when payments would switch from dollars into roubles and yuan.

President Vladimir Putin earlier this year forced European customers to open rouble bank accounts with Gazprombank and pay in Russian currency if they wanted to continue receiving Russian gas. Supplies were cut off to some companies and countries that refused the terms of the deal.

Russia signed a landmark $37.5billion extension to its deal to supply gas to China on the eve of the invasion.

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It started pumping gas to China through the 3,000-km (1,865 mile) Power of Siberia gas pipeline in late 2019. Putin hailed the move as a “genuinely historical event, not only for the global energy market, but above all for us, for Russia and China.”

Meanwhile, in Europe, Italy plans to turn down the heating in homes and businesses to help cut gas consumption by around 5.3 billion cubic metres to reduce the risks associated with a total interruption of gas flows from Russia, the government’s saving plan showed on Tuesday.

The move comes at a time when energy prices have jumped following Moscow’s invasion of Ukraine and supplies have been curtailed.

The government plans to drop the heating temperature by 1 degree Celsius in industrial and residential buildings, the document said.

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