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June 17, 2014

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Russia cuts gas supply to Ukraine over unpaid bill

RUSSIA cut off gas to Ukraine yesterday in a dispute over unpaid bills that could disrupt supplies to the rest of Europe and set back hopes for peace in the former Soviet republic.

Russia said Kiev missed a deadline for a US$1.95 billion debt payment and it would now only get gas it has paid for in advance. It insisted Ukraine must also ensure that it lets Russian gas flow through international pipelines to Moscow’s clients in the European Union.

Western-backed Ukrainian President Petro Poroshenko  said yesterday that he wanted troops to regain full control of the border with Russia this week. After that, there could be a cease-fire and efforts to come up with a peace plan.

Hopes of a reduction in tensions had already been dented before the failure of the gas talks by Saturday’s shooting down of a plane by pro-Russian militants at Luhansk in the east, an attack on Russia’s embassy in Kiev and new accusations from NATO that Russia is arming Ukrainian rebels.

“Thanks to the unconstructive position of the Ukrainian government, today a prepayment system was introduced,” Alexei Miller, the chief executive of Russian state exporter Gazprom , told Prime Minister Dmitry Medvedev.

He said Ukraine had “adopted a position that can only be called blackmail,” adding: “They wanted an ultra-low price.”

Moscow, he said, would no longer accept Kiev paying off part of its total debt to restart supplies. It would restart gas supplies only when Ukraine paid off all the almost US$4.5 billion it owed and paid up front for a month’s deliveries.

Ukrainian Prime Minister Arseny Yatseniuk accused Russia of deliberately blocking a deal to cause Kiev supply problems next winter. “But it is not about gas. It is a general Russian plan to destroy Ukraine,” Yatseniuk said in Kiev. “It is yet another step against the Ukrainian state and against Ukrainian independence.”

A source at Gazprom said supplies to Ukraine had been reduced as soon as the deadline passed and Ukrainian Energy Minister Yuri Prodan said the country was receiving no gas.




 

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