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Putin says situation with Ukraine’s non-payments for gas absolutely unacceptable

April 11, 2014, 18:10 UTC+3 NOVO-OGARYOVO

“The drama of the situation lies in the fact the lowest prices were in effect at the beginning of this year and Ukrainian partners stopped paying even at those prices,” Russian President says

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© ITAR-TASS/Alexei Druzhinin

NOVO-OGAREVO, April 11. /ITAR-TASS/. Russia’s President Vladimir Putin has dismissed the situation around Ukraine’s non-payments for the Russian natural gas it has already consumed.

“The drama of the situation lies in the fact the lowest prices were in effect at the beginning of this year and Ukrainian partners stopped paying even at those prices,” Putin said at a session of the Security Council. “April 7 marked a yet another date for payments under the gas contract for March 2014 and they didn’t pay us a single dollar or ruble of the $ 540 million they were supposed to pay.”

“That’s an absolutely unacceptable situation,” he said.

Russia’s major producer and supplier of natural gas, Gazprom says Ukraine’s debt for the previously delivered gas stood at $ 2.2 billion as of April 9. The corporation had to raise the price for Ukraine to $ 385.5 per 1,000 cubic meters in the second quarter of the year, since its Ukrainian counterpart, Naftogaz Ukrainy had encroached on the obligations under a supplement to the delivery contract stipulating the price of $ 268.5 - it did not pay up the current bills on time or pay on the overdue bills.

Following the denouncement of the 2010 Kharkov agreements by Russia, which gave Ukraine a price discount for gas in exchange for a prolongation of rent of the naval base in Sevastopol by Russia’s Black Sea Fleet, the actual price went up by another $ 100 per 1,000 cubic meters, thus bringing Ukraine’s total debt to $ 2.2 billion at the beginning of April.

Incumbent authorities in Kiev said in response that they were discontent with the revised price. “We don’t recognize this price,” acting interim minister of energy and coalmining, Yuriy Prodan, said, adding that it was an “unfair and non-market one.”

“We proceed from the assumption that agreements were reached at the end of 2014 and the price effective on January 1, 2014, was set at $ 268.5,” he said. “There are no grounds envisioned by the agreement for changing or raising it sharply.

Putin describes US reaction to his letter as strange

Russian President Vladimir Putin has described Washington’s reaction to his letter to 18 European leaders on the situation in Ukraine as strange.

Russian Foreign Minister Sergei Lavrov said during a Russian Security Council meeting on Friday that the first reaction to Putin’s letter had come from Washington.

“The US State Department’s official spokesperson said that Russia should not politicize its gas dealings with Ukraine and should stick to market price calculation,” Lavrov said, adding the United States accused Russia of gas blackmail.

“All this is a bit strange. It is strange because it is not nice to read letters addressed to other people. The letter was not addressed to them but to European gas consumers. Everybody has got accustomed to the fact that our American friends tap conversations. But peeping and spying is not nice at all,” Putin said, noting that the price formula was fixed in the official contracts between Russian Gazprom and Naftogaz Ukrainy in 2009.

Russian Foreign Minister Sergei Lavrov referred to remarks made by the State Department’s spokeswoman Jennifer Psaki who described Moscow’s actions as an attempt to exert pressure on Kiev. “We condemn Russia’s efforts to use energy as a tool of coercion against Ukraine,” Psaki told journalists at a briefing.

She tried to portray the whole thing in way that Russia had voluntarily raised gas prices for Ukraine. In fact, Moscow just followed the letter and spirit of agreements signed with Kiev.


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