Ukraine threatens to take Russia to court over gas

Saturday 05 April 2014 20.56
Ukraine will have to pay more for its gas after the increase by Gazprom
Ukraine will have to pay more for its gas after the increase by Gazprom

Ukraine has said it rejected Russia's latest gas price hike and threatened to take its neighbour to an arbitration court over a dispute that could affect deliveries to western Europe.

Prime Minister Arseniy Yatsenyuk said Russia's two rate increases in three days were a form of "economic aggression".

He said they were aimed at punishing Ukraine's new leaders for overthrowing the Russian-backed regime of former president Viktor Yanukovych.

Russia's natural gas giant Gazprom this week raised the price of Ukrainian gas by 81% to €354 from €196 for 1,000 cubic metres.

It means that Russia now requires the ex-Soviet state to pay the highest rate of any of its European clients.

"Political pressure is unacceptable. And we do not accept the price," Mr Yatsenyuk told a government meeting.

"Russia was unable to seize Ukraine by means of military aggression. Now, they are implementing plans to seize Ukraine through economic aggression."

Mr Yatsenyuk said Ukraine was ready to continue to purchase gas from Russia at the old rate because this was "an acceptable price".

But he said that Ukraine must be ready for the possibility that "Russia will either limit or halt deliveries of gas to Ukraine".

Gazprom's western European clients saw their deliveries limited in 2006 and 2010 when the energy giant halted supplies to Ukraine due to disagreements over price.

Russia's gas meets about a third of EU nations' demand.

Nearly 40% of that flows through Ukraine, while the remainder travels through the Nord Stream undersea pipeline to Germany and another link that runs through Belarus and Poland.