Gazprom threatens Ukraine with price rise
If Ukraine did not pay a $2.4 billion debt...
Gazprom said Wednesday that if Ukraine did not pay a $2.4 billion debt, the company might more than double the price of natural gas, a move that would deal a harsh blow to Ukraine`s economy, International Herald Tribune reported.
The Russian state-controlled natural gas monopoly said it would try to "avoid" cutting off supplies to Ukraine. Gazprom briefly cut off the flow of gas in 2006 in a dispute that disrupted supplies throughout Europe. Most of the gas Russia sends to Europe is piped through Ukraine.
"We will certainly try to take into account all the lessons of that situation and make every effort to avoid events developing according to this scenario," Sergei Kupriyanov, a Gazprom spokesman, told reporters during a conference call Wednesday.
Gazprom has said that an Oct. 2 memorandum signed by Prime Minister Yulia Tymoshenko of Ukraine and Prime Minister Vladimir Putin of Russia would lead to a long-term agreement on supplies and a transition to market prices over a three-year period, beginning Jan. 1, provided Ukraine pays its debt.
Ukraine now pays $179.50 per 1,000 cubic meters, or 35,000 cubic feet, of gas. The market price would be more than $400, Gazprom said.
Naftogaz, the Ukraine state energy company, estimates its debt at $2 billion for the past three months of gas supplies. Oleg Dubina, chief executive of the company, said Wednesday that due to a spike in demand for dollars, Naftogaz was having some difficulty acquiring the currency necessary to make payment.
The $2.4 billion Gazprom has demanded includes penalties for late payment.
During Wednesday`s conference call, Kupriyanov of Gazprom reiterated that the debt must be paid in order for the agreement on a gradual transition to market prices to hold.
"If the transition to market prices is not gradual, but as of January 1 of next year, then based on current European prices for gas, the price for Ukraine might be more than $400," said Kupriyanov, adding Ukraine had been warned about the situation last summer.
By Sophia Kishkovsky, International Herald Tribune