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Ukraine to lose Russia's hefty gas discount: report

  • A member of the Russian Navy (L) stands next to a Ukrainian soldier closing a gate bearing the Ukrainian national coat of arms on a Ukrainian naval base in Sevastopol March 21, 2014. REUTERS/Vasily Fedosenko

MOSCOW: Ukraine is likely to lose its hefty gas discount when Moscow and Kiev revise their agreement on the Black Sea fleet, Kommersant business daily reported on Friday.

If Kiev loses its $100 discount, it will end up paying up to $480 per 1,000 cubic metres for natural gas, the highest price of any of gas giant Gazprom's clients in Europe, the newspaper said.

Soon after coming to power in 2010, the then president of Ukraine, Viktor Yanukovych, agreed to extend the lease on Russia's Black Sea fleet in Crimea that was due to expire in 2017 for 25 years, until 2042.

In return, Moscow agreed to cut natural gas prices for Ukraine by $100 for every 1,000 cubic metres.

Russian President Vladimir Putin's spokesman Dmitry Peskov told Kommersant that these agreements would be revised now that Crimea has become part of Russia.

"Legally the fleet is now stationed not in Ukraine but in one of Russia's regions and therefore the Kharkov agreements will in any case be revisited," he told the newspaper.

Peskov was not immediately available for further comment on Friday.

The expected gas price hike will deal a huge blow to Ukraine's struggling economy and is likely to exacerbate the raging political crisis.

Russia sent troops to Ukraine's peninsula of Crimea, saying it needed to protect Russian speakers after a popular uprising ousted Yanukovych last month.

Putin this week signed off on a treaty officially incorporating the peninsula into Russia.

End-of-the-year haggling over energy prices has become a familiar problem in bilateral ties, with Russia repeatedly cutting gas supplies to Ukraine and Europe over the past few years.

 
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Summary

Ukraine is likely to lose its hefty gas discount when Moscow and Kiev revise their agreement on the Black Sea fleet, Kommersant business daily reported on Friday.

Soon after coming to power in 2010, the then president of Ukraine, Viktor Yanukovych, agreed to extend the lease on Russia's Black Sea fleet in Crimea that was due to expire in 2017 for 25 years, until 2042 .

End-of-the-year haggling over energy prices has become a familiar problem in bilateral ties, with Russia repeatedly cutting gas supplies to Ukraine and Europe over the past few years.


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