Moscow: Russian gas giant Gazprom on Tuesday announced it was ending a gas discount enjoyed by Kiev in a major blow for the Ukrainian economy, as Nato foreign ministers prepared to forge a response to Russia’s intervention in Crimea.
Ukraine on Monday reported a partial withdrawal of Russian troops from its eastern border amid growing signs that the Kremlin is ready to defuse the worst East-West standoff since the Cold War.
Familiar tactic
But tensions still remained high and Russia appeared to resort to the familiar tactic of using Gazprom to put pressure on the troubled Ukrainian economy.
The crisis is at a critical juncture as Ukrainian politicians jockey for position ahead of May 25 presidential elections and tentative diplomacy gets under way between Moscow and the West to find common ground after the fall of president Viktor Yanukovych.
Ukraine will now pay $385.5 dollars per 1,000 cubic metres of gas from the previous cut rate of $268.5, Gazprom chief executive Alexei Miller said.
“The discount will no longer apply,” he said in a statement. “This is due to the inability of the Ukrainian side to pay for debts from 2013 and realise full payments for current deliveries.”
The discount had been agreed between Yanukovych and President Vladimir Putin in December 2013 as a form of financial aid to the former regime.
The price hike — although widely expected — is a new blow to the Ukrainian economy which needs an international rescue to stave off the risk of default.
