KIEV: Ukraine said yesterday it was suspending payments to Russia for deliveries of gas, ratcheting up the tension in a standoff that has the potential to leave European Union states cut off from the Russian gas supplies on which they depend.
A large proportion of the natural gas which EU states buy from Russia is pumped via Ukrainian territory, so if Russia makes good on a threat to cut off Ukraine for non-payment of its bills, customers further west will have supplies disrupted.
Andriy Kobolev, chief executive of Ukraine’s state-run energy company Naftogaz, said the increased price Russia was demanding for its gas was unjustified and unacceptable. “Accordingly, we have suspended payments for the period of the price negotiations,” Kobolev said in an interview with Zerkalo Nedely newspaper.
In fact, Ukraine has de facto stopped payments already because it failed to make an instalment of over $500m due earlier this month to Russian state gas giant Gazprom. But the decision to formally suspend payments shows there is no sign of a compromise with Moscow, and may push the two sides closer to a repeat of past “gas wars”, when Ukraine’s gas was cut off, with a knock-on effect on supplies to EU states.
Kiev and Brussels have been scrambling to blunt the impact of any decision by Moscow to cut off gas to Ukraine. In particular, they are working out ways to keep supplies flowing to EU states, and for those countries to then pump the gas to Ukraine by reversing the flow in their pipelines. Moscow says it does not want to turn off Ukraine’s gas if it can be avoided, and that it will honour all commitments to supply its EU customers. Gazprom could not immediately be reached for comment on Saturday.
The dispute over Ukraine, precipitated by the overthrow of Ukrainian president Viktor Yanukovich, has brought Russia’s relations with the West to their most fraught state since the end of the Cold War in 1991. Reuters
