Russia blinks first in gas row

Russia has all but abandoned a gas blockade against neighbouring Ukraine after European trade partners complained that their own supplies had been hit and warned Moscow that relations would suffer.

    Ukraine said that the Russian gas blockade was blackmail

    Gazprom, the state-controlled monopoly, said on Monday that it would restore full gas supplies to Europe by Tuesday, two days after it cut supplies to Ukraine in a dispute over a steep price rise.

    Gas deliveries across Europe, which imports a quarter of its supply from Russia, fell by up to a quarter as Moscow reduced exports through a pipeline to Ukraine that continues on to European customers. Russia accused Ukraine of siphoning off supplies intended for customers further along the pipeline.
       
    Russia, which took over the G8 chairmanship for the first time this month and promotes itself as a reliable energy source, made the cuts on Sunday after Ukraine rejected Moscow's demand for a fourfold price rise.
       
    But Germany, Russia's main trade partner, told Moscow that it would think twice about importing more gas unless Russia could prove it was a reliable supplier.    

    Russia has lowered the pressure
    of gas entering Ukraine

    As criticism mounted, Gazprom said in a statement: "With the aim of preventing a possible energy crisis, caused by Ukraine illegally taking gas, Gazprom has taken the decision to deliver additional gas into the gas transport system of Ukraine. 
       
    "We stress that the additional delivery of gas is not designed for Ukrainian consumers but is meant for transit through the territory of Ukraine for delivery to consumers outside the borders of Ukraine." 

    'Blackmail'
     
    Ukraine, which denies stealing any gas, accused Russia of blackmail and said Moscow wanted to destabilise its economy.
       
    But the dispute with Ukraine remains unresolved and Russia will still pump 30 million cubic metres a day of gas less than it did at the end of 2005. That is about 6% of the total Gazprom normally pumps to Ukraine and onward to Europe.
       
    Russia turned off the taps after Ukraine refused to sign a new contract that would have ended the preferential price treatment of the Soviet era. 
       
    Moldova, another former Soviet state that has shifted its attentions to the West from Moscow, said Russia had all but cut off its gas supplies, also because it refused to accept higher prices.
       
    Michael Glos, the German economy minister, said Moscow must show it can be trusted as a supplier.
       
    "Thirty per cent of our gas comes from Russia at the moment. That should be increased," Glos told the German radio station WDR. "But it can only be increased if we know that deliveries from the east are dependable."

    SOURCE: Reuters


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