Russia could cut gas off this week

Published: Thursday 26th February 2015 by The News Editor

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Russia could cut off supplies to neighbouring Ukraine by the end of the week if it does not get further payments from the country, a spokesman for the gas company Gazprom has said.

Sergei Kupriyanov said in televised remarks that “if no new funds are received from Kiev, then naturally we cannot continue delivering gas to Ukraine”. He did not specify the sum.

Following a bruising dispute over prices and debt that raised fears of supply disruptions in Europe, Russia and Ukraine signed a deal in October requiring Kiev to pay in advance for gas shipments.

Mr Kupriyanov said that discussions with Ukraine’s gas company, Naftogaz, were ongoing, but gave no other details about the talks.

His words echoed an announcement yesterday by Russian president Vladimir Putin that Ukraine’s latest payment would be good for “another three to four days”. Mr Putin did not give a concrete deadline for the halting of deliveries.

But it is unclear whether Ukraine, which is on the brink of bankruptcy as a protracted fight against Russia-backed separatists in the east continues to erode the country’s economy, is capable of paying.

The International Monetary Fund (IMF) agreed this month to give Ukraine a new bailout deal worth 15.5 billion euro (£11.3 billion). The new funding came as a previous aid package to Ukraine, which had already received 4.6 billion euro (£3.4 billion) last year, ran into trouble.

Money from the new package has yet to be disbursed, however, leaving Ukraine under financial pressure.

Mr Kupriyanov said that for now, Russia was willing to “set aside” the issue of whether gas delivered to rebel-held territory in eastern Ukraine should be considered a part of Ukraine’s gas bill.

Last week, Russia accused Ukraine of cutting gas supplies to areas in the east controlled by Russia-backed rebels.

In response, Russia started pumping gas directly to the east this week, saying that the supplies should be considered a part of the overall volume of its gas exports. Ukraine protests that it cannot manage gas distribution in areas outside its control.

Mr Putin yesterday said Ukraine’s decision to halt gas supplies to eastern regions, home to 4.5 million people, “smacks of genocide”.

Today, Dmitry Peskov, the president’s spokesman, was quoted by Russian news agency Tass as saying that the government and Gazprom are in “constant contact” with European authorities about the Ukraine problem.

Published: Thursday 26th February 2015 by The News Editor

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