KIEV/GORKI, Russia: Russia cut off gas to Ukraine Monday in a dispute over unpaid bills that could disrupt supplies to the rest of Europe and set back hopes for peace between the former Soviet neighbors.
Following the loss of 49 troops when pro-Russian rebels shot down a military transport plane over the weekend, Ukraine’s new president ordered his forces to retake full control of the country’s border with Russia, saying the move could pave the way for negotiations.
Calling time on weeks of wrangling in talks over natural gas supplies, Russia said Kiev had missed a Monday morning deadline to repay $1.95 billion owed for previous purchases, and announced that Ukraine would now only get gas it has paid for in advance.
At the same time, Moscow insisted that Ukraine must let Russian gas flow across the country through international pipelines to Russia’s clients in the European Union – noting a temptation for Kiev to tap into those supplies in transit.
Kiev and Moscow blamed each other for the failure to agree on the price of future gas deliveries and refused to abandon well-established positions: Russia offering a discount and Ukraine rejecting that as a tool for political manipulation.
The talks are bound up with the worst crisis between Russia and Ukraine since the Soviet Union collapsed – a crisis that has brought Western sanctions on Moscow, the Russian annexation of Crimea and Cold War-style saber-rattling along the borders.
Western-backed Ukrainian President Petro Poroshenko, elected last month to replace the Kremlin-friendly leader ousted in February, said Monday that he wanted troops to regain full control of the border with Russia this week. After that, there could be a cease-fire and efforts to come up with a peace plan.
“The cease-fire will be declared as soon as the border is secure,” Poroshenko told his security chiefs. “Declaring a cease-fire while the border is open would be irresponsible.”
His remarks underlined his concern that Russia is supporting the rebels by sending in tanks, guns and men. Hopes of a lowering of tension had already been dented before the gas talks failed by the downing of the plane near the eastern frontier, an attack on Russia’s embassy in Kiev and new accusations from NATO that Russia is arming the Ukrainian rebels.
That dragged down Russian financial markets Monday and helped oil and gas prices – already firm on fears of supply disruption due to violence in Iraq – climb in Europe.
“Thanks to the unconstructive position of the Ukrainian government, today a prepayment system was introduced,” Alexey Miller, the chief executive of Russian state exporter Gazprom, told Prime Minister Dmitry Medvedev during a meeting at a government residence at Gorki, outside Moscow.
He said Ukraine had “adopted a position that can only be called blackmail,” adding: “They wanted an ultra-low price.”
At a news conference, he said it would no longer be enough for Kiev to pay part of its debt for supply to resume. That would now happen only once Ukraine paid off all the almost $4.5 billion and paid upfront for a month’s deliveries, he said.Ukrainian Prime Minister Arseny Yatseniuk accused Russia of deliberately blocking a deal to cause Kiev supply problems next winter, when temperatures plunge and heating needs increase.
“It is not about gas. It is a general Russian plan to destroy Ukraine,” Yatseniuk said. “It is yet another step against the Ukrainian state and against Ukrainian independence.”
Medvedev said some of Kiev’s ruling elite were not up to the job, echoing outrage over Ukraine’s acting foreign minister insulting President Vladimir Putin during the weekend embassy protest in Kiev.
“From the paranoid behavior of the acting foreign minister at the Russian Embassy in Kiev to the failure of the prime minister of Ukraine to agree on gas on the basis of a discounted price,” he said on Facebook.
Ukrainian Energy Minister Yuri Prodan confirmed that the country was receiving no gas.
Ukraine has at least 12 billion cubic meters of gas in storage, enough to meet its and the EU’s needs over the summer.
However, a long-term reduction of supply could hit EU consumers, which get about a third of their gas needs from Russia, around half of it through pipelines that cross Ukraine.