Ukraine Stops Gas Payments to Russia

On Saturday, Ukraine told Russia it will not forward any payments on gas to Russia due to the increased price.

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 was quoted as saying in an interview with Ukraine’s Zerkalo Nedely newspaper.

Russia’s state gas company Gazprom decided to scrap the gas discount to Ukraine after Moscow annexed Crimea. Part of the discount deal included an extended lease for Russia’s Black Sea fleet on the peninsula. Gazprom said the contract does not apply anymore since Crimea is now a part of Russia.

Gazprom raised the price to $383.50 per 1,000 cubic meters and raised it again to $484. Ukrainian Energy Minister Yuri Prodan said Kyiv will not pay more than $387 and will bring Russia to arbitration court over the prices.

Russian President Vladimir Putin sent a letter to European leaders and told them to help Ukraine settle their $2.2 billion debt. The EU said it would help Ukraine pay the bills and supply gas to the country if Russia does shut off gas to Ukraine. The shut off could affect Europe since the majority of the pipelines to them from Russia run through Ukraine. In early March, ambassadors from Slovakia, Czech Republic, Hungary, and Poland asked the US to export more natural gas to Europe.