Ukraine sus­pends gas pay­ments to Rus­sia

Daily Trust - - BUSINESS -

Ukraine’s state-run en­ergy com­pany Naftogaz has sus­pended gas pay­ments to Rus­sia un­til the con­clu­sion of price talks, chief ex­ec­u­tive An­driy Kobolev was quoted as say­ing on Satur­day.

Rus­sia, which last month an­gered Western pow­ers by an­nex­ing Ukraine’s Crimea penin­sula, has raised the price it charges Kiev for gas and said it owes Moscow $2.2 bil­lion in un­paid bills. It also says Kiev had failed to pay its bill on time.

Rus­sian gas gi­ant Gazprom rlier this month in­creased gas price for Ukrainian con­sumers to $485 per 1,000 cu­bic me­ters (tcm) from $268 for the first quar­ter, say­ing Kiev was no longer el­i­gi­ble for pre­vi­ous dis­counts.

“The ques­tion of re­pay­ment of debt is di­rectly linked to the main­te­nance of gas prices at the level of the first quar­ter,” Kobolev told the Zerkalo Nedely weekly in an in­ter­view, re­fer­ring to the orig­i­nal price of $268 per tcm.

“We see no rea­son to re­vise the price. We con­sider the price at around $500 as non-mar­ket, un­jus­ti­fied and un­ac­cept­able. Ac­cord­ingly, we have sus­pended pay­ments for the pe­riod of the price ne­go­ti­a­tions.”

Kiev gets about half of its gas from Moscow and a large pro­por­tion of Europe’s gas is pumped from Rus­sia via Ukraine.

High debts, which could jus­tify a re­duc­tion in gas ship­ments to Ukraine, have raised the spec­tre of a re­peat of pre­vi­ous “gas wars”, when dis­putes be­tween the two for­mer Soviet republics led to a cut in on­ward sup­plies to western Europe.

A re­peat could hurt Rus­sia as its pub­lic rev­enues de­pend on sell­ing gas to Europe.

Rus­sian Pres­i­dent Vladimir Putin warned on Thurs­day that Moscow could cut off gas to Ukraine, po­ten­tially threat­en­ing Euro­pean sup­plies, but later played down the threat.

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