Ukraine asks Rus­sia for lower gas prices for win­ter sea­son

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Em­bold­ened by a deal with in­ter­na­tional cred­i­tors to write down part of its debt, Ukraine on Fri­day asked Rus­sia for lower gas prices for the win­ter sea­son.

Gas dis­putes be­tween Rus­sia and Ukraine have led to cut-offs of sup­ply in the past, and one stand­off in 2009 caused se­ri­ous dis­rup­tions in gas flow­ing from Rus­sia via Ukraine to the Euro­pean Union. Rus­sia and Ukraine last year struck an emer­gency deal on prices through the win­ter. That deal has ex­pired, how­ever, and the sides have to hold new talks if Ukraine is to re­ceive more Rus­sian gas. Prime Min­is­ter Arseniy Yat­senyuk said on Fri­day he is con­vinced that Kiev and Moscow should go back to the last win­ter deal, which saw Ukraine pre-pay for gas but re­ceive a size­able dis­count. "We are con­vinced that the only mech­a­nism to en­sure a gas transit to the EU as well as sta­ble sup­plies to Ukraine is ap­ply­ing the same mech­a­nism that was worked out last year be­tween the EU, Ukraine and Rus­sia," he said in com­ments re­leased by his press of­fice.

Un­der a deal reached last Novem­ber, Ukraine agreed to buy gas from Rus­sia at $385 per 1,000 cu­bic me­ters. On top of that, Rus­sia of­fered a 30 per­cent dis­count of the con­tract price, which was worth up to $100 off per 1,000 cu­bic me­ters, depend­ing on the fluc­tu­a­tions in global energy prices. The Ukrainian gov­ern­ment on Thurs­day reached a deal with its in­ter­na­tional bond- hold­ers to lighten its public debt bur­den. It will see the cred­i­tors write off 20 per­cent of their bond hold­ings, shrink­ing $19 bil­lion in sov­er­eign debt to $15.5 bil­lion.

Rus­sian cred­i­tors did not take part in talks, but Ukrainian Fi­nance Min­is­ter Natalie Jaresko on Thurs­day in­sisted that Moscow should ac­cept the same terms be­cause "it would not get a bet­ter deal" than Ukraine's other cred­i­tors. Moscow in­sists that it wants to be fully re­paid for a $3 bil­lion loan it gave to Ukraine. The debt is due at the end of the year.

Speak­ing to re­porters late Thurs­day, Rus­sian Fi­nance Min­is­ter An­ton Silu­anov noted that Rus­sia's loan "was not a com­mer­cial one. We pro­vided funds for Ukraine with a be­low-mar­ket in­ter­est rate."

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