Gazprom has announced a massive increase in the price Ukraine must pay for gas.
Russia’s natural gas producer wants over than 40 percent more, stepping up economic pressure on Kiev in its political standoff with Moscow.
Gazprom’s Chief Executive Officer, Alexei Miller, says the rise is needed because Ukraine’s debt for unpaid gas bills now stands at 1.9 billion euros.
The firm claims the hike is in line with earlier agreements as transportation tariffs have increased.
Russian President Vladimir Putin agreed in December to a discount for Ukraine after its abrupt decision not to sign a trade agreement with the EU and rebuild economic ties with Moscow instead.
Gas price changes in Ukraine
- After the 2004 Orange Revolution Gazprom started to raise the price of gas to Ukraine, which the company used to offer at a below market price.
- In 2009, there was a major row between Russia and Ukraine. During this quarrel, Gazprom almost entirely shut down its pipelines to Ukraine, threatening ongoing supplies to several European countries.
- The row ended with the Yulia Tymoshenko-led government signing a deal which fixed the price of gas between 400 and 500 dollars per 1000 cubic meters.
- In 2010, President Viktor Yanukovych signed the Kharkiv pact with Russia. It gave Moscow the right to extend its lease of a major naval base in the Ukrainian Black Sea port of Sevastopol for an additional 25 years.
- In exchange, Russia agreed to provide gas to Ukraine, 100 dollars less than the agreed price range. Since June 2010, Ukraine paid Gazprom around $234/mcm (thousand cubic meter).
- In 2012, the price of gas per 1000 cubic meters was fixed at 416,25 dollars.
- In December 2013, Ukraine was given a discount after President Yanukovych agreed to rebuild economic ties with Moscow rather than the European Union.
- This April, Gazprom changed its price to 385,5 dollars.