Russia’s Gazprom raised the price of gas for Ukraine to $485 per 1,000 cubic metres from April. Official Kiev disagreed with it and has been negotiating a reduction since then. The talks have so far brought no result despite several trilateral meetings between Russia, Ukraine and the European Union.
“The price of gas imported from Russia for Naftogaz of Ukraine, starting from April 2014, is based on the actual price for the first quarter of 2014 ($268.5 per 1,000 cubic metres) due to the absence of official information,” the National Bank said.
The European Commission is hoping to resume trilateral gas talks with Russia and Ukraine before the end of July, EU Energy Commissioner Guenther Oettinger said after a meeting with Ukrainian Energy and Coal Industry Minister Yuriy Prodan last week.
Prodan said, however, that Ukraine was “ready to discuss at the talks only the European Commission’s interim package solution concerning the price and debt settlement”.
He reiterated Kiev’s position on the debt: “We will pay it right away as soon as the price is agreed.” “If no agreement is reached, the final decision will be made by the Stockholm court of arbitration,” he added.
Russian Energy Minister Alexander Novak said gas talks with Ukraine might resume only after Naftogaz of Ukraine has paid the debt for November and December 2013.
If gas is a political weapon, then this is a political weapon in the hands of the Russian government. If gas is a commodity, as it is in the rest of the world, we trade on the basis of a contract, not on the basis of whether Russia likes the Ukrainian government or not Arseniy Yatsenyuk Parliament-appointed Prime Minister “There will be no talks before that,” Novak said at the World Petroleum Congress on June 19.
Novak said Gazprom had not received any payments from Naftogaz of Ukraine since June 16 when the Russian company stopped gas supply to Ukraine in the absence of prepayment for June.
Naftogaz of Ukraine should pay $1.454 billion for gas supplies in November and December 2013 and show progress in paying for April and May, Miller said.
Ukraine’s debt had grown by $2 billion during the trilateral consultations between Russia, Ukraine and the European Union, and now Kiev has to pay for 11.150 billion cubic metres of gas supplies to Ukraine up to date, Miller said.
He described Ukraine’s position at the talks as “blatant blackmail”, “absurd, ultimatum-like and unconstructive”.
Miller said the current situation differed from that in 2009 when “Ukraine paid, whereas now it is not paying and is not going to”.He said parliament-appointed Prime Minister Arseniy Yatsenyuk had upset the last round of gas talks with his statement that Ukraine would not pay more than $268 per 1,000 cubic metres of gas.
The European Union found Yatsenyuk’s statement inopportune, he added.
Yatsenyuk also said his government was insisting on changes to the effective gas contract. “If gas is a political weapon, then this is a political weapon in the hands of the Russian government. If gas is a commodity, as it is in the rest of the world, we trade on the basis of a contract, not on the basis of whether Russia likes the Ukrainian government or not,” he said.
The current price of Russian gas for Ukraine is $485 per 1,000 cubic metres. Ukraine is insisting on the price of $268.5.
Minister Novak suggested returning to the 2010 agreement under the current contract effective until 2019, which will set the price at $385 per 1,000 cubic metres.
The new price has been in effect since June 1. “The overall debt for the supplies in April and May is $2.3 billion”, he said.
Miller said that Ukraine had taken 3.5 billion cubic metres of gas in May and 2.7 billion cubic metres in April.
Initially, the debt for the first two months of the second quarter was put at $3 billion based on the price of $485.5 per 1,000 cubic metres.
However, Prodan said the gas price of $385 per 1,000 cubic metres offered by Russia to Ukraine was not the best one on the market.
Prodan said an acceptable gas price for Ukraine could be within the range of $268.5 to $385.
He believes that the only way to settle the gas dispute with Russia is to take the matter to the Stockholm court of arbitration.