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Russian government to draft proposals on long-term gas discounts for Ukraine

June 11, 2014, 20:46 UTC+3 NOVO-OGARYOVO

Prime Minister Dmitry Medvedev stated that this will be done despite a difficult situation in the Russian economy

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© ITAR-TASS/Alexander Astafyev

NOVO-OGARYOVO, June 11. /ITAR-TASS/. The Russian government will draft proposals on long-term gas supply discounts for Ukraine, Russian Prime Minister Dmitry Medvedev said at the president’s meeting with government members.

“We will draft for our Ukrainian partners government proposals that will mean the long-term character of discounts,” Medvedev said.

He added that this will be done despite a difficult situation in the Russian economy.

“However, to provide support to our Ukrainian partners, whose economy is in a very difficult situation, we are ready to do that,” the prime minister said. “Our Ukrainian partners need not to discuss traps that Russia [allegedly] sets, but remember that there is an unpaid gas debt that may turn into [a system of] prepayment.”

Russian President Vladimir Putin agreed: “The situation is a bit strange because there is a contract that is effective and was signed long ago, including by people who work in the [Ukrainian] government today, but they decided to reject it at a certain stage — strange but true.”

“We will work both to support Ukraine’s economy and not to lose the client, so we are ready to act openly, honestly, in a maximum transparent manner, and, by all appearances, a number of European partners also understand that our position is just,” he added.

The president recalled that Russia will not introduce prepayment for gas supplies for Ukraine until June 16.


President Putin suggests to freeze gas deal terms for certain period

On Wednesday, Putin instructed the government to draft a solution on fixed gas supply terms for Ukraine for a certain period.

“I would like to ask the government and the head of the cabinet to think on how it could be possible at the level of the government of the Russian Federation or upon agreement with the government of Ukraine freeze these terms and make them absolutely guaranteed and free from changes for a certain period,” Putin told the ministers.

He noted that the Ukrainian partners are concerned that the discount offered to them may be unilaterally canceled.

“We have never done so. We have always demonstrated that our agreements are reliable to the maximum,” Putin stressed.

Russia currently sells gas to Ukraine at a price of $485.5 per 1,000 cubic meters, but Ukraine insists the price should be lowered to that of this year’s first quarter ($268.5 per 1,000 cu m).


Russia raises price for natural gas

Moscow raised the price for Kiev to $385.5 per 1,000 cu m in the second quarter of 2014 because Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.

Another raise to $485.5 per 1,000 cu m was due to the cancelation of the Kharkiv Accords with Ukraine, which had been struck in 2010 and stipulated that Russia’s lease of naval facilities in Crimea [then part of Ukraine] would be extended by 25 years beyond 2017 until 2042. The accords also envisioned a $100 discount.

Crimea refused to recognize the legitimacy of authorities who were propelled to power in Ukraine during a coup in February 2014. The peninsula held a referendum on March 16 and overwhelmingly voted to reunify with Russia, seceding from Ukraine after some 60 years as part of it. Putin signed the accession agreement on March 18.

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