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Pay up, or we will cut gas, Russia tells Ukraine

world Updated: Oct 03, 2007 21:09 IST
Fred Weir
Fred Weir
Hindustan Times
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Russia's natural gas monopoly Gazprom says it will slash gas supplies to Ukraine by month's end if a $1.3-billion debt is not paid.

But the Russian company insists the dispute has nothing to do with Ukraine's delicate post-election coalition talks that might replace Moscow-friendly Prime Minister Viktor Yanukovych with a pro-Western government headed by Yuliya Tymoshenko.

"If the debt is not settled in October, Gazprom will be forced to begin to cut natural gas supplies to Ukrainian consumers," the company said in a statement, adding that it is a strictly commercial dispute with no political implications.

Ukraine's energy minister, Yury Boiko, flew to Moscow on Wednesday in hopes of resolving the issue, which could lead to a repeat of a January 2006 Russian gas blockade that switched off power supplies across Ukraine and led to energy shortages in downstream western Europe.

Moscow has steadily raised gas prices for Ukraine, though the former Soviet republic still receives energy at about half the price paid by clients in Europe.

Yanukovych, who has been PM for the past year, has claimed credit for keeping Ukrainian energy costs relatively low.

Although Yanukovych's pro-Russian Party of Regions came first in last Sunday's parliamentary elections, with about 34 per cent of the votes, the two pro-Western Orange parties headed by Tymoshenko and President Viktor Yushchenko polled a combined 45 per cent.

A new "Orange coalition" government, likely to be headed by Tymoshenko, could be announced as early as Friday.

"We will do all it takes to cooperate with Russia in order to have no gas cuts," Tymoshenko told journalists on Wednesday.