Russia Announces Second Gas Price Hike for Ukraine

Energy | April 3, 2014, Thursday // 17:08|  views

Photo by EPA/BGNES

Russia will raise the price of gas for Ukraine to USD 485 per 1000 cubic meters.

The latest increase, which is the second in just two days, suggests that Russia's state-owned energy concern Gazprom is to sell gas to Kiev for 80% more than what it charged under the old "special" pricing regime that was in force until April 1, estimates by the Frankfurt Allgemeine Zeitung have suggested.

The news was first reported by Gazprom's chief executive Alexei Miller, short after a Ukrainian delegation was in Moscow to negotiate new possible discounts.

Miller held talks with Ukraine's Energy Ministry officials, MPs from Kiev and Ukrainian energy entity Naftogaz's representatives.

He also met Russian President Dmitry Medvedev, who has been actively involved in decision-making on the issue. New pricing offered by Gazprom is unprecedented in comparison to what is being offered to other European countries.

Miller justifies price hikes with delays on Ukraine's payments to Gazprom, which reportedly amount to USD 2.2 B (EUR 1.6 B).

Earlier Moscow also introduced an export duty on gas to Ukraine.

Existing discounts prior to April were made in accordance with a 2010 agreement between Kiev and Moscow envisaging reduced gas prices in return of an extended lease of Crimea-based Black Sea Fleet until 2042 (without the deal it would have ended as early as 2017).

The document signed by ousted President Yanukovych however is no longer deemed valid, as Ukrainian agency UNIAN reported Kiev had received Russia's formal denunciation of the agreement.

Crimea is not virtually part of Russia's territory after a regional vote which approved its secession from Ukraine.

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Tags: Ukraine, Gazprom, Medvedev, Crimea, Miller, gas


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