Brussels, 20/05/2014 (Agence Europe) - Russia may reduce the price of gas for Ukraine if, and only if, Ukraine repays all the gas invoices outstanding as of 1 April 2014 - totalling USD 2.237 billion - said Russian Energy Minister Alexander Novak after a meeting with European Energy Commissioner Günther Oettinger in Berlin on 19 May.
Novak told reporters that Russia was still respecting its commitments to Ukraine and European consumers. As of 19 May, Ukraine's bill for gas supplies from Russia had not been paid and, in fact, no bills at all have been paid for the past two months, said Novak. He said that both Ukraine and the Commission had confirmed the debt in terms of amounts of gas supplied and the cost of it. The meeting in Berlin comes ahead of an EU-Russia-Ukraine meeting on security of Russian gas supplies in connection with the Ukrainian debts to Russian gas company Gazprom.
Novak said: “We can discuss discounts on this sum if mechanisms for settling Ukraine's outstanding debt and ensuring Ukraine's further solvency can be found”. “We believe that it is impossible to use the figure of USD 268.5 per 1,000 cubic metres in our price discussions. That was the price for the first quarter established by a contract that had not been extended. We have the current contract and a price formula fixed in this contract, according to which the price is USD 485 per 1,000 cubic metres. This is the price which can be considered”. The minister added: “We do not understand the reasons for raising this question. The price of USD 268.5 dollars cannot be considered under the current circumstances because it does not match even average European market prices”.
Since 1 April 2014, Russia has been demanding USD 485 per 1,000 cubic metres for gas to Ukraine, but Ukraine wants to return to the price of USD 268.5 negotiated with Moscow in December before the Ukrainian president Viktor Yanokovitch was deposed in February.
Ukraine is refusing to pay the new price for Russian gas and has not paid its bills to Gazprom for the past three months, totalling USD 2.2 billion. Russia is now threatening to cut off gas supplies to Ukraine unless it pays in advance this month for its supplies for June. Including this prepayment, Ukraine's total debt to Gazprom stands at USD 3.5 billion.
The EU imports a quarter of its gas from Russia, nearly half of which is transported through Ukraine, and does not want to run the risk of disturbances of supplies of Russian gas, as occurred in previous Russian-Ukrainian gas disputes in 2006 and 2009.
On Monday, Commissioner Oettinger said progress had been made over the past few days on a number of issues, but agreement had not yet been reached. The next meeting of the Russian energy minister, the Energy commissioner and the Ukrainian energy minister, Yuri Prodan, will take place on 26 May, possibly in Berlin, with the aim of reaching agreement on the Ukrainian-Russian gas spat by the end of May. (EH)