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Weapons of Mass Destruction (WMD)

Putin Bashes Kiev's Groundless Demand for Lower Gas Price as 'Blackmail'

RIA Novosti

17:48 01/07/2014

MOSCOW, July 1 (RIA Novosti) – Kiev is blatantly blackmailing Moscow by demanding an unjustified contract price reduction for Russian gas, President Vladimir Putin said Tuesday.

"Ukraine's violation of its contractual gas purchase obligations has become a common problem. Kiev refuses to pay its debts and resorts to pure blackmail — [it] demands an unjustified reduction of the price," the president said at a meeting with Russian ambassadors and permanent envoys.

"First of all, responsible partners and gas suppliers must not be affected by actions of Ukrainian politicians and officials. And we, all Europeans, should ponder on ways to lower the possibility of various political and economic risks and force majeure cases from emerging on the continent," Putin concluded.

Starting June 16, Russian gas giant Gazprom was forced to enact an advance payment scheme for gas deliveries to Ukraine after multiple rounds of talks on the new price and debt repayment mediated by EU Energy Commissioner Guenther Oettinger failed.

The Russian compromise was a $100 discount to the contract price, bringing it down to $385, as well as a phased debt repayment scheme, calculated using the discount before June 26. Ukraine rejected the offer, dissatisfied with the discount mechanism, as the reduction would have come as a result of lower export duties. Kiev pushed for revisions to the contract itself, deadlocking the negotiations.

Gazprom CEO Alexei Miller said Kiev's move to refocus the talks on price revisions rather than Ukraine's $4.46 billion debt, compounded by Naftogaz' unwillingness to compromise, sabotaged a sensible compromise.

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