Russia threatens to cut off Ukraine's gas after talks fail

Jun 16, 2014, 08:24 IST | Agencies

Kiev: Russia threatened to cut off Ukraine's gas later today after the two sides failed to strike a deal that would have saved Europe from supply disruptions, stoking the worst East-West crisis since the Cold War.

Vladimir Putin
Russian President Vladimir Putin. File pic

Ukraine hosted the last-gasp talks hoping to avoid an energy crisis compounding the new pro-Western leaders' problems as they confront a two-month separatist insurgency threatening the very survival of their ex-Soviet state.

But a top official from Russia's state gas firm Gazprom told AFP that the EU-brokered talks that stretched through the night had failed to bridge the two sides' acrimonious disagreement over price and how much debt Kiev exactly owed Moscow.
"We reached no agreement and the chances that we will meet again are slim - we are already on the plane heading back (to Moscow)," official Gazprom the Russian gas company's official spokesman Sergei Kuprianov said by telephone.

"If we receive no pre-payment by 10:00 am (0600GMT), then we obviously will deliver no gas." An EU source told AFP that the 28-nation bloc "tabled a compromise proposal (package)" submitted by EU Energy Commissioner Guenther Oettinger in a bid to broker an interim solution.

The third "gas war" between Russia and Ukraine since 2006 flared when Moscow nearly doubled its rates in the wake of a deadly winter uprising that pulled Kiev out of the Kremlin's historic orbit.

Ukraine receives half its gas supplies from Russia and transports 15 per cent of the fuel consumed in Europe - a reality that prompted Oettinger to urgently step in and try to break up the feud.

Kiev said heading into the negotiations that it was ready to make a USD 1.95 billion (1.45 billion euro) payment demanded by Moscow if Russia agreed to cut its ongoing price to USD 326 from USD 485.50 for 1,000 cubic metres of gas.

But Russian President Vladimir Putin said USD 385 per 1,000 cubic metres was his final offer and threatened to turn off Ukraine's taps if no payment was made by early today.

The gas talks were further clouded by a new diplomatic feud that exploded after Ukraine's acting foreign minister called Putin "a prick" while trying to restrain protesters who attacked Moscow's embassy compound in Kiev on Saturday. Nationalists with signs reading "Kremlin - hands off Ukraine!" tore down the embassy's Russian tricolour while others smashed its windows and overturned diplomats' cars.

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