Russian gas exporter Gazprom will halt supplies to Ukraine if it fails to pay off part of its gas debts by Monday, chief executive Alexei Miller said yesterday (12 June), raising fears of gas flow disruptions to Europe.
Miller said that if Ukraine failed to pay $1.95 billion (€1.44 billion) to Gazprom it would start requiring Kyiv to pay in advance for further shipments, and that if it did not receive any money at all, it would cut off supplies.
A dispute over gas prices is central to Russia’s crisis in relations with Ukraine, which has led to the worst standoff with the West since the end of the Cold War.
No agreement has been reached in several rounds of talks brokered by the European Commission. As the latest talks hit an impasse, Gazprom set 16 June as the deadline for Ukraine to pay off part of its debt.
“If Ukraine pays for no [gas] volumes at all, it means that […] gas shipments to Ukraine will be zero,” Miller said in televised comments.
Moscow says Ukraine has piled up more than $4 billion in debts to Gazprom, which also delivers gas to the EU, half of it through pipelines that cross Ukraine.
Russia almost doubled the gas price for Ukraine to $485 per 1,000 cubic metres from April 1 after Ukraine’s Moscow-leaning president was toppled in February.
Ukraine wants Moscow to stick to the price of $268.5 agreed for Kyiv at the end of last year after ousted President Viktor Yanukovich ditched plans to forge closer ties with the EU.
Moscow has offered to cut the price to $385, by eliminating an export duty of $100 per 1,000 cubic metres. This would be in line with the last year’s average price for Russian gas in Europe of $387.
Source: EurActiv, 2014