Russia Shuts Gas Supply to Ukraine

World | January 1, 2009, Thursday // 00:00

On Thursday, Russia and its energy monopoly Gazprom had officially cut off supplies of natural gas, CNN reported.

Ukraine owes the energy giant about USD 2 B for past natural gas deliveries while it disputes the new price set by Gazprom for 2009 deliveries, which is more than double the price from 2008 - increasing from USD 100 per 1,000 cubic meters to USD 250.

The Gazprom said their move was triggered by months of negotiations with Ukraine that had failed to resolve the issue of outstanding payments.

Ukraine insists that it had paid USD 1.5 billion toward the debt, but Gazprom said it had not received the payment.

Without natural gas, many Ukrainians face chilly homes in the middle of a cold winter and an overnight snow forecast.

A similar dispute between Gazprom and Ukraine at the beginning of 2006 led to a gas supply cut off and gas shortages in several EU countries.

Pipes across Ukraine carry about a fifth of the EU's gas needs.

Both Gazprom and Ukraine have reassured Western Europe that their natural gas supply would not be affected by the dispute with Kiev. A Gazprom spokesman, cited by CNN, said on Russian state television the company had actually increased the deliveries to Europe.

The EU urged Russia and Ukraine to resume negotiations and not to let the dispute disrupt supplies to Europe.

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