Russia gas giant ends discount to Ukraine as NATO plans war games

MOSCOW: Russian gas giant Gazprom on Tuesday announced it was ending a discount enjoyed by Kiev in a major blow for the Ukrainian economy, as Ukraine approved the holding of joint military exercises with NATO close to Russia’s newly-annexed region of Crimea.

With Moscow able to use gas as a lever to pressure Kiev, Gazprom chief executive Alexei Miller said Ukraine will now pay $385.5 dollars per 1,000 cubic metres of gas from the previous cut rate of $268.5.

“The discount will no longer apply,” he said in a statement.

The discount had been agreed between Yanukovych and president Vladimir Putin in December 2013 as a form of financial aid to the former regime.

Ukraine has reported a partial withdrawal of Russian troops from its eastern border, amid tentative signs of a calming in the worst East-West standoff since the Cold War. However, NATO said it could not confirm the retreat.

Ukraine’s Parliament, meanwhile, met one of Moscow’s key demands by voting unanimously to disarm all self-defence groups that sprang up across the country during its political crisis that first erupted over a ditched EU alliance in late November.

But tensions still remained high over two weeks after Moscow for mally annexed Crimea, as NATO foreign ministers prepared to forge a response to Russia’s intervention and emboldened foreign policy.

UKRAINE WILL NOW HAVE PAY $385.5 PER 1,000 CUBIC METRES OF GAS FROM THE PREVIOUS CUT RATE OF $268.5