Ukraine under greater Russian pressure on gas

Moscow: Russia's Gazprom piled more pressure on Ukraine to pay its gas bill yesterday, saying the $2 billion debt deprived Russia of funds it needed to sustain growth in the economic crisis and would force Russians out of jobs.

"Since the majority of the goods imported from Ukraine are also made in Russia, non-payments for gas damage those sectors where Ukrainian goods compete on Russia's domestic markets", Gazprom spokesman Sergei Kup-riyanov said.

"This cannot but affect the industries and the people who work in them."

Ukraine's main export industries are metals and mining, as well as heavy machinery.

Those are the industries in Russia hardest hit by the crisis as mines and mills cut their workforces and shorten hours in response to slackening demand.

Kupriyanov's comments, accusing Ukraine of effectively subsidising heavy industry by underpaying for gas, a huge input cost, appeared designed to provoke outrage among Russian workers as unemployment rates skyrocket.

He listed potentially vulnerable industrial cities and factories by name. About 400,000 Russians lost their jobs in November, bringing the overall jobless rates to a 15 year high of 6.6 per cent of the workforce.

Gazprom maintained a public pressure campaign over the debts for a second day. On Monday it said it had warned European customers about potential disruptions to gas transit should it fail to clinch a deal with Kiev.

Ukraine owes Gazprom around $2 billion for gas supplies and European countries watch the dispute with nervousness after a previous row between the two states sharply cut fuel exports to Europe in January 2006.