Russia Says Ukraine Must Pay In Advance For Gas As Kiev's Natural Gas Bill Stands At $3.51B

  on
  • Alxander Novak
    Russia's Energy Minister Alexander Novak said that Ukraine will need to make advance payments for gas, starting June.
  • Donetsk, Ukraine referendum
    A man carries referendum propaganda material outside a regional government building in Donetsk, eastern Ukraine on May 8, 2014.
1 of 2

Ukraine will need to pay in advance for Russia's natural gas, starting in June, since it has failed to pay for deliveries since April, Energy Minister Alexander Novak says.

Russia's state-owned gas company Gazprom said Wednesday that the Kiev administration’s debt for Russian gas stands at nearly $3.51 billion. Moscow has threatened to cut gas supplies to Ukraine if it does not receive an advance payment for the gas already consumed.

"According to contract ... failure of obligations automatically leads to a switch to prepayment for gas deliveries for Ukraine starting from June 1," Novak said Thursday in a statement, according to Reuters. "Russia can't and should no longer carry the burden of support of Ukraine's economy alone, giving it discounts on the gas price and forgiving debts, in fact covering the deficit in Ukraine's trade.”

Russia supplies close to 30 percent of the gas used in Europe and ships half of it through Ukraine. It had cut the price of its gas to $268.50 per 1,000 cubic meters (35,314.67 cubic feet) when Viktor Yanukovych, the Ukrainian president later overthrown, signed a deal with Russia instead of the European Union. But once the uprising began in Kiev and an interim government came to power in February, Russia returned the rate to its 2009 level of $485 per 1,000 cubic meters, the highest in Europe.

Russia’s Energy Ministry also said Gazprom will send Kiev a preliminary bill before May 16 and the company will decide how much gas to ship, depending on the payments Ukraine makes before May 31, Reuters reported.

Join the Discussion