Ukraine plans to use EU and IMF money to pay for Russian gas, but will not pay a cent unless Moscow agrees a market price, its authorities say.Its caretaker PM, Arseniy Yatsenyuk, made the point at a meeting with European Commission chief Jose Manuel Barroso in Brussels on Tuesday (13 May).
He said: “We want a deal based on market conditions. If Russia rejects this, we will bring Russia to [an international arbitrage] court in Stockholm. If I’m not mistaken, there’s 20 days left - this is the final call for Russia to sit at the negotiating table.”
He noted that Russia’s ultimatum on gas debts
is offset by its seizure of Ukrainian energy assets in Crimea last month, worth “tens, if not hundreds, of billions of dollars.” He listed stolen assets as: 2 billion cubic metres of gas in storage vats; two energy firms; onshore and offshore drilling facilities; and offshore gas fields.
Ukraine’s ambassador to the EU, Kostyantin Yeliseyev, told EU observer on Wednesday that no EU or International Monetary Fund (IMF) money will be used to pay Russia’s “political” gas price.
“We are not so stupid or naive as to pay this price,” he noted.
“The situation is not easy and time is running: We need to start filling our underground storage facilities so that we can ensure transit of [Russian] gas to European countries [in winter],” he added.
Russian supplier Gazprom has said it will halt deliveries to Ukraine on 2 June unless it makes a pre-payment of $1.7 billion based on a price of $485 per thousand cubic metres (tcm) - almost twice the amount charged to its EU customers.
Last year it offered Ukraine $268.5 per tcm as part of a bailout for its former leader Viktor Yanukovych.
But it cancelled the offer when he fell from power and Ukraine resumed preparations to sign a free trade pact with the EU.
For its part, the EU on Tuesday signed off a €1.6 billion macro-financial aid package to Ukraine, saying the first part, worth some €600 million, will be disbursed “soon.” The deal comes on top of an IMF bailout tranche of $3.2 billion paid out one week ago.
A commission spokesman, Simon O’Connor, noted: “It is aid for the Ukrainian budget to meet its external financing needs, which includes payments in the energy sector.”
Barroso told press alongside Yatsenyuk:
“Russia, if it wants to be seen as a credible supplier cannot play political games with energy.” He added: “If Russia continues with this kind of behaviour, it will only lead to its further isolation.”