Ukraine and Russia have failed to break through a deadlock on gas price that threatens to leave a number of European countries without Russian energy supply.
Latest round of EU-brokered talks finished in Brussels on Wednesday with no deal as Kiev refused to accept an offer of $385 per 1,000 cubic meters.
Yuriy Prodan, Ukraine’s energy minister, said the deal was unacceptable because the price depended on a Russian discount of $100 which could easily be withdrawn if Moscow changed its mind.
Ukraine wanted a price set by the market laid down in a commercial contract, Prodan said, but “unfortunately Russia proposed a way of fixing the price which I would call political.”
Despite the failure to ink a deal during the talks in Brussels, there is still hope of progress until the new deadline set by Russia for cutting off gas supply to Ukraine.
“We should use our remaining days [until Monday] to our advantage,” Guenther Oettinger, EU Energy Commissioner, said, adding that all parties, including at head-of-state level, would remain in contact in an effort to reach an accord.
“We are still in negotiations,” he said. “I can see movement on both sides and both sides will need to continue to move.”
Oettinger said in his opinion the talks had established some common ground on price, delivery volumes and duration into 2015.
A threat of ‘a whole other level’
Alexander Novak, Russian energy minister, said Gazprom had made an important gesture in giving the talks extra time to Monday to reach an agreement, failing which the company would then demand pre-payment for gas.
“We are now waiting for action from Ukraine,” Novak said.
Russia had also laid out a payment schedule to cover Ukraine’s outstanding bills and future payments, he said, and this was “sufficient for an accord that would allow us to continue supplying gas.”
As the talks ended in Brussels, Vladimir Putin, Russia’s president, said Ukraine was driving negotiations into a “dead end”.
“If our offer is rejected then we will shift to a whole other level. That is not our choice and we do not want that,” Putin said.