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Russia nearly doubles Ukraine gas price in a week

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Russia nearly doubles Ukraine gas price in a week


For the second time in three days, Russia has raised the price of gas for Ukraine, stepping up pressure on an economy already on the brink of bankruptcy.

The head of state-owned energy giant Gazprom, Alexei
Miller, told Prime Minister Dmitry Medvedev that 1,000 cubic metres would now cost $485.

That means that since the start of the week, the price Moscow is charging Ukraine has nearly doubled. An earlier increase was announced on Tuesday.

In hiking the price, Russia has scrapped two discounts simultaneously.

One was introduced in 2010 when Ukraine agreed to extend terms for Russia’s Black Sea Fleet in Crimea until 2042.

The second was agreed in December after Ukraine’s then President Viktor Yanukovych scrapped a trade deal with the European Union in favour of closer ties to Moscow.

As part of that deal, the Russian government agreed to scrap gas export duties for Ukraine-bound gas.

Earlier this week, however, the Russian Federation Council, the upper house of the parliament, voted to annul the agreement on the Black Sea Fleet after Crimea was annexed by Russia.

Ukraine, which has a new International Monetary Fund loan package to cushion some of the blow, has dismissed the increase as politically motivated, saying the price was too high and that it should not have to pay for supplies at this level.

But Gazprom has now also said that Ukraine’s debts for Russian gas now stand at $2.2 billion, up from an earlier estimate of $1.7 billion.

On Thursday, it additionally told Ukraine to increase the level of gas in storage to ensure its stable transit to Europe.

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