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Ukraine Sees Gazprom Charging 37% More for Gas in Q2

Valves of a gas pipeline are seen not far from Kiev. Photographer: Andrey Sinitsin/AFP/Getty Images
Valves of a gas pipeline are seen not far from Kiev. Photographer: Andrey Sinitsin/AFP/Getty Images

March 10 (Bloomberg) -- Ukraine faces a 37 percent increase in the price it pays for Russian natural gas after OAO Gazprom canceled a discount and threatened to cut supplies, Ukrainian Energy Minister Yuri Prodan told reporters yesterday.

Ukraine will pay about $368.50 per 1,000 cubic meters of the fuel in the second quarter, Prodan said. Russia agreed last year to cut the price it charges Ukraine to $268.50. Gazprom rescinded the discount last week and said Ukraine risks a repeat of 2009, when the Moscow-based company reduced shipments during a pricing dispute.

Gazprom, which supplied more than half of Ukraine’s gas last year, agreed to the discount when the nation was governed by President Viktor Yanukovych, who fled to Russia in February after three months of street protests. Russian President Vladimir Putin has refused to acknowledge Kiev’s successor government. Pro-Russian forces have taken up positions in Ukraine’s Crimea region, which will hold a referendum on March 16 on joining Russia.

“I will have talks on March 19 in Brussels with the EU commissioner and companies,” Prodan said, referring to a planned meeting with European Union Energy Commissioner Gunther Oettinger on possible substitutions for Russian gas. Slovakia is likely to help with gas transit, Prodan said, citing a conversation with Oettinger.

Ukraine needs to import about 30 billion cubic meters of gas this year, of which a third may come from Slovakia, Prodan said March 5. Gazprom said March 7 in a statement it’s owed $1.89 billion by Ukrainian state gas company NAK Naftogaz Ukrainy for supplies already received.

To contact the reporters on this story: Jake Rudnitsky in Kiev at jrudnitsky@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net; James M. Gomez at jagomez@bloomberg.net Dan Weeks, Andrea Dudik

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