Wednesday, June 11, 2014

Ukraine Rejects Russian Offer to Cut Gas Price

Ukraine has rejected a Russian offer that would effectively cut the price Kyiv pays for gas by 20 percent.
Ukrainian Prime Minister Arseny Yatsenyuk said at a government meeting Wednesday the "discount" of $100 per thousand cubic meters is not a suitable substitute for the re-written contract Ukraine has been seeking.

"Russia has offered us a decrease of the gas price by $100 as a so-called discount. I want to state officially that we are familiar with such Russian traps. The discount is set by the government of the Russian Federation and can be cancelled by the decision of the government of the Russian Federation," said Yatsenyuk.

The current contract the two countries signed in 2009 prices Russian gas to Ukraine at $485 per thousand cubic meters.

Officials from both sides continued negotiations Wednesday in Brussels as they try to resolve the dispute on pricing and Ukraine's multi-billion-dollar energy debt.

Russia has threatened to cut off gas supply, which could have effects on supplies to other parts of Europe. The state-run Gazprom gas company said Wednesday it is giving Ukraine until next week before implementing a new requirement to pre-pay for any new gas.

The discussions are going on alongside other efforts to defuse the crisis in eastern Ukraine, where Ukrainian forces have been carrying out an operation to retake control from pro-Russian separatists.

On Tuesday, Ukraine's President Petro Poroshenko ordered the creation of "evacuation" corridors to allow people to escape the fighting and for the government to assist in the movement of refugees and in the distribution of medical services in the largely Russian-speaking east.

Russian Foreign Minister Sergei Lavrov welcomed the Poroshenko directive as "a step in the right direction."

In Kyiv Tuesday, visiting U.S. Assistant Secretary of State Victoria Nuland pledged U.S. support for economic development and efforts to stabilize eastern Ukraine. She also again congratulated the Ukrainian people for last month's "free and fair" presidential election.


1 comment:

  1. Oettinger: Gazprom, Naftogaz need to reach agreement for at least 12-15 months...

    Gazprom and Naftogaz need to reach agreement on the price and volumes of gas supplies for at least 12-15 months, European Energy Commissioner Guenther Oettinger said Wednesday after a three-party meeting on gas issues in Brussels involving Russia, the European Union and Ukraine.

    He added that all parties would have to make additional concessions on the gas issue.

    Oettinger stressed that Ukraine considered the $385 for 1,000 cu m an overestimated price that depended n the political decision of Russia.

    “Russia provided an ironclad guarantee of making a price discount for a specific period. However, Ukraine considers this price overestimated as compared to the market price and notes that in any case it will depend on the political decision of the Russian government,” Oettinger said.

    Meanwhile, the European Commission “hopes for a solution to the gas issue by the upcoming Monday”. According to Oettinger, Russia and Ukraine need to coordinate their positions in the next few days.


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