Russia orders Ukraine to pre-pay gas

Russia has ordered that all gas sent to Ukraine from June 1 will have to be paid in advance.

Valves of gas pipelines in a gas station outside Kiev

Russia has ordered that all gas sent to Ukraine from June 1 will have to be paid in advance. (AAP)

Russia has ordered crisis-hit Ukraine to pay upfront for all its future natural gas deliveries because of billions of dollars in outstanding debts.

The largely-anticipated announcement imperils supplies to a large swathe of the European Union because nearly 15 per cent of all Russian gas consumed by the 28-nation bloc transits through Ukraine.

Ukraine has refused to meet the deadline in protest over Russia's decision to nearly double the price it charges its neighbour for gas imports following the February overthrow of a Kremlin-backed regime in Kiev.

Russia's energy ministry said Ukraine had missed a Wednesday deadline to pay debts worth $US3.5 billion ($A3.8 billion) and that all gas sent to the ex-Soviet state starting June 1 will have to be paid in advance.

"Russia is introducing a pre-payment regime for gas deliveries to Ukraine," Energy Minister Alexander Novak said in a statement.

Novak noted that President Vladimir Putin had last month warned in a letter to 18 EU nations that Russia would require Ukraine to make pre-payments unless Europe helped cover its debt to Moscow's government-run natural gas giant Gazprom.

"Russia can no longer - and must not - be the only one carrying the burden of supporting the Ukrainian economy, offering it discounts for gas and forgiving debts," Novak said.

The energy minister said Russia had "through its subsidies been effectively covering the deficit in Ukraine's trade with EU member states".


Share

2 min read

Published

Updated

Source: AAP



Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world