Russia orders Ukraine to pre-pay for gas

8th May 2014, Comments 0 comments

Russia ordered crisis-hit Ukraine on Thursday to pay upfront for all its future natural gas deliveries because of billions of dollars in outstanding debts.

The largely-anticipated announcement imperils supplies to a large swathe of the European Union because nearly 15 percent of all Russian gas consumed by the 28-nation bloc transits through Ukraine.

Ukraine has refused to meet the deadline in protest over Russia's decision to nearly double the price it charges its neighbour for gas imports following the February overthrow of a Kremlin-backed regime in Kiev.

Russia's energy ministry said Ukraine had missed a Wednesday deadline to pay debts worth $3.5 billion and that all gas sent to the ex-Soviet state starting June 1 will have to be paid in advance.

"Russia is introducing a pre-payment regime for gas deliveries to Ukraine," Energy Minister Alexander Novak said in a statement.

Novak noted that President Vladimir Putin had last month warned in a letter to 18 EU nations that Russia would require Ukraine to make pre-payments unless Europe helped cover its debt to Moscow's government-run natural gas giant Gazprom.

"Russia can no longer -- and must not -- be the only one carrying the burden of supporting the Ukrainian economy, offering it discounts for gas and forgiving debts," said Novak.

The energy minister said Russia had "through its subsidies been effectively covering the deficit in Ukraine's trade with EU member states."


© 2014 AFP

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