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Kiev threatens to sue Moscow over gas price

Dispute could imperil gas deliveries to Western Europe but Ukraine says it will not siphon other countries' gas.

Last updated: 05 Apr 2014 11:43
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Russia's gas meets about a third of EU nations' demand, nearly 40 percent of which flows through Ukraine [Reuters]

Ukraine has rejected Russia's latest gas price hike and is threatening to take its neighbour to arbitration court over a dispute that could imperil deliveries to Western Europe.

Prime Minister Arseniy Yatsenyuk said Russia's two rate increases in three days were a form of "economic aggression" aimed at punishing Ukraine's new leaders for overthrowing a Moscow-backed regime last month.

"Political pressure is unacceptable. And we do not accept the price of $500 (per 1,000 cubic metres of gas)," Yatsenyuk told a government meeting on Saturday.

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

Russia's natural gas giant Gazprom raised the price of Ukrainian gas by 81 percent and now requires the ex-Soviet state to pay the highest rate of any of its European clients.

Yatsenyuk said Ukraine was ready to continue to purchase gas from Russia at the old rate of $268.50 because this was "an acceptable price".

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

'Theft' claims

Ukrainian Energy Minister Yuriy Prodan told the same meeting that Kiev was ready to take Gazprom to arbitration court in Stockholm if Moscow refused to negotiate over a lower price.

"I have firmly said that we are going to try to reach an agreement," said Prodan, according to the AFP news agency.

"But if we fail to agree, we are going to go to arbitration court, as the current contract allows us to do," he said. "There is still time to agree with Russia."

Prodan also said Kiev would not take natural gas from pipelines that deliver supplies to European consumers if Russia turned off gas to Ukraine, according to Reuters news agency. 

Russia has accused Ukraine of stealing gas from pipelines that transit its territory during previous price rows, a charge Kiev denies.

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 percent 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.

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