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Dublin: 6°C Wednesday 26 January 2022

Russia threatens to cut off Ukrainian gas in three weeks

Russia has told its neighbour “pay the debts and we can agree something”.

Image: AP/Press Association Images

THE TENSIONS IN Ukraine took another twist today, as Russia threatened to shut off gas supplies within three weeks, a move that could impact the supplies of at least 18 EU nations.

With Russian rebels claiming victory in referendums on sovereignty, the move will cause even more tensions in the region.

Russian Deputy Energy Minister Anatoly Yanovsky had already told reporters today that no deal would be reached on a price for Russian gas until Ukraine paid off outstanding debts.

Ukraine has received $27 billion from international lenders last month, but has not used that money to pay down their gas debt after Gazprom, the Russian state energy giant, raised the Ukrainian gas price by 81 per cent.

Gazprom wants Ukraine to pay $485 per 1,000 cubic metres of gas, more than Russia charges any EU state. Russian Energy Minister Alexander Novak says that Russia will present Ukraine with a bill this week.

Gazprom today warned that it may halt natural gas shipments to Ukraine on 3 June.

Gazprom chief executive Alexei Miller said Ukraine must pay upfront for its June deliveries because of outstanding debts. He added that Kiev had until the morning of June 3 to make the payment “or Ukraine will receive zero cubic metres (of gas) in June,” Interfax reported.

Miller’s comments mark an escalation a war that the EU has tried to avoid. With almost 15 per cent of all gas consumed in Russia coming from Europe, it could prove disastrous for many states.

The problem lies in the face that Ukraine currently stores around a billion cubic metres of gas that has been earmarked for EU clients. If the country, which is effectively reliant on the IMF funding, doesn’t meet its debt obligations, it may need to tap into those supplies.

Ukraine has done this previously, in 2006 and 2009.

Read: Rebels claim victory in independence referendums in eastern Ukraine

Read: The Ukraine crisis isn’t hitting Irish energy bills yet, but here’s how it might.

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