Russian gas exporter Gazprom said it has cut supplies to Ukraine after failing to strike a last minute deal with Kyiv over unpaid debts. Ukraine must now also make advance payments for its gas supplies.
The breakdown in negotiations was swiftly followed by lawsuits from both parties.
Gazprom CEO, Alexei Miller outlined the energy giants position:
“Right after we implemented the pre-payment regime, we immediately filed a suit in the Stockholm arbitration court to make them pay their debt of $4.5 billion.”
Gazprom’s Ukrainian counterpart Naftogaz, has filed its own complaint in Stockholm, claiming it’s overpaid on Russian gas for years.
Gazprom’s CEO stressed that supplies to its European customers would continue, but, with safe transit reliant on Ukrainian pipes, he alluded that Kyiv may siphon gas to meet domestic demand.
The spat, though economic in detail, appears increasingly political in nature. Kyiv’s failure to secure a better gas price comes after the ousting of former President Victor Yanukovych.