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Gazprom won’t extend discount gas price for Ukraine - Putin

Published time: March 04, 2014 13:43
resident Vladimir Putin facing journalists at the Novo-Ogaryovo residence to answer questions concerning the situation in Ukraine, March 4, 2014. (RIA Novosti / Aleksey Nikolskyi)

resident Vladimir Putin facing journalists at the Novo-Ogaryovo residence to answer questions concerning the situation in Ukraine, March 4, 2014. (RIA Novosti / Aleksey Nikolskyi)

Starting April 1, Gazprom will no longer offer Ukraine discounted gas prices because it is more than a year and $1.5 billion late on their debt payments to Russia’s largest gas producer for deliveries, Russian President Vladimir Putin said Tuesday.

“If you don’t pay us and your debt is ever-increasing, there is no discount, this makes perfect commercial sense for Gazprom,” Putin said speaking to a small group of reporters at his residence outside of Moscow.

Gazprom CEO Alexey Miller, in a separate televised comment on Tuesday, confirmed the current standing $1.5 billion and will reach $2 billion by the February.

“If they don’t get payments on time from Ukrainian partners, then they act according,” the President said, insisting the any gas cut off wouldn’t be political, but economic.

“Like any other major company they have revenues, expenditures, and budgets,” the president said.

In December President Putin and his counterpart Viktor Yanukovich signed a series of aid packages for Ukraine, including a gas discount that reduced the price of Russian gas to $268.50 per 1,000 cubic meters down from $400.

Gazprom chief Alexei Miller said Tuesday in televised remarks that Ukraine has accumulated a $1.5-billion debt for Russian gas supplies. He added at a meeting with Russian Prime Minister Dmitry Medvedev that Gazprom will cancel a price rebate for Ukraine starting April 1.

Under the agreement, Gazprom has the right to revisit the discount every quarter, and decide whether or not to renew it.

The 33 percent discount was meant to help Naftogaz, Ukraine’s nearly bankrupt national oil and gas company. Ukraine’s coup-appointed Prime Minister, Aresny Yatsenuk, has suggested privatizing portions of Ukraine’s energy sector, blaming Naftogaz for eating away profits.

Included in the deal was a total of $15 billion in aid, and the first $3 billion installment was placed in Eurobonds on the Irish Stock Exchange in December 2013.

Gas tiffs and pricing disputes over advanced payments have caused major supply disruptions, both in the winters of 2006 and 2009, leaving many European customers out in the cold.

Ukraine currently imports more than half of its gas from Russia, but has its sights set on energy independence by 2020. Before Euromaidan protests hit the country, Ukraine signed a shale gas deal with Chevron for $10 billion.

Russia is building a maze of pipelines to the north and south, to ensure more reliable supply to European customers, and Ukraine is wooing foreign companies in joint ventures in shale and offshore reserves.

Comments (22)

 

Sasa 27.03.2014 23:04

[quote name='Sasa' time='27.03.2014 23:01']

ope n your eyes and look around you - it is 21st century, and EVERYTHING is business, especially the deals made by your "president" ; ; in Ukraine.
[/quote ]

...First thing you are going to experience in Ukraine is going to be NO JOBS, NO FUTURE. Then come expensive cars and suits from your goverment leaders saying that it is necessary for the good of the country to live like animals, and to sell your children for a piece of bread. Then you will see companies being bought by EU-USA coporations=more people without jobs. That is future of Ukraine now.

 

Sasa 27.03.2014 23:01

Andrew Jennings 22.03.2014 23:20


You do that. Build pipelines to nowhere because Europe doesn't want your unreliable gas.
Here in Ukraine we don't need Gazprom.

  


This is a classic thinking of a manic-depressive patient...first they are manic about killing everyone, not needing anything, being on their own, then when EU just forgets about you the moment their asses start freezing, there comes depressive phase "Why I don't live in Crimea now?"...open your eyes and look around you - it is 21st century, and EVERYTHING is business, especially the deals made by your "president" ; in Ukraine.

 

Andrew Jennings 22.03.2014 23:20

"Russia is building a maze of pipelines to the north and south to ensure a more reliable supply to European customers"

You do that. Build pipelines to nowhere because Europe doesn't want your unreliable gas. Kremlin threats that use gas supply as a diplomatic tool to gain geopolitical advantage is now a thing of the past...

C'e st fini

Here in Ukraine we don't need Gazprom. Losing its 30% European energy market share should displease investor confidence (including Putin who owns a 4.5% share) but won't affect simpleton Tay Sachs. He's already affected by lacking the enzyme needed for proper brain functioning.


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