Russia & China continue ditching US dollars in settlements in favor of national currencies

Gazprom Neft will switch from US dollars to yuan and rubles to pay for refueling aircraft flying to or from China, the company’s CEO Alexander Dyukov told reporters on the sidelines of the Eastern Economic Forum.

“We are starting in September, and by the end of the year we can transfer virtually all payments for aviation fuel in China to yuan,” Dyukov said. He added that settlements for refueling Chinese airliners at Russian airports will be converted into rubles.

The agreement has been reached between Gazprom Neft, which operates 34 airports in China, and China's national jet fuel operator, after a lengthy period of talks regarding a move away from making payments in US dollars.

This is the first time, however, for the Russian-Chinese aviation fuel business to transfer payments to national currencies. According to Dyukov, test settlements in yuan and rubles showed an additional economic effect.

Dyukov also said his company and the Chinese operator plan to double total volumes of aircraft fueling both in Russia and China to some 250,000 tons by 2025. The total volume of Gazprom Neft aircraft fueling stations in China increased to 56.5 thousand tons in the first half of 2021, 12% higher than the same period last year and 29% higher than in 2019.

Moscow and Beijing have been pushing for a greater role of their respective currencies on the global financial market and have made a number of steps to lower their US dollar holdings in the past several years.

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