Putin says Ukraine gas payments situation 'critical'

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Putin says Ukraine gas payments situation 'critical'

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Russia’s President Vladimir Putin has informed several European leaders about the “critical situation” over Ukraine’s natural gas debt and about a possible impact on the transit of gas to Europe, Russian news agencies reported on Thursday.

Putin expressed “extreme concern about the situation surrounding Ukraine’s gas debts and… supplies of gas to the European Union,” state-run RIA cited Putin’s spokesman, Dmitry Peskov, as saying.

In a letter to European leaders, Putin said the problem must be solved quickly.

State-controlled gas producer Gazprom stopped pumping gas to Ukraine during price disputes in the winters of 2005-2006 and 2008-2009, leading to reduced supplies in European countries that receive Russian gas via pipelines that cross Ukraine.

That came one day after Putin said Gazprom could ask Ukraine to pay for the gas it gets up front – but will not do that yet.

At a meeting with government ministers on Wednesday, Putin said it has the right to ask for advance payments under a 2009 contract between Ukraine and Russia but there will be further talks before that happens.

“Taking into account the complex situation in Ukraine and the fact that we have not yet finished talks with the European Union, I’m asking Gazprom and the government to hold off on the possibility [of asking for advance payments] under the terms of that contract until additional consultations take place,” Putin said.

Earlier Ukraine’s energy minister had announced the country will temporarily stop buying Russian gas until the issue is settled.

Gazprom increased the price of gas for Ukraine by 80 percent after the ousting of Moscow-backed President Viktor Yanukovich and the installation of a pro-Western government.

Kyiv said the price rise was a politically-motivated move to punish it for pursuing closer ties with the European Union.

Europe gets around a third of the gas it uses from Russia and half of that comes via Ukraine.