Russia-Ukraine Gas War II on the horizon

27 February 2009

After ruining the credibility of Russia and Ukraine as reliable fuel suppliers to Europe, the next round of the Russia - Ukraine gas war is looming with the Russian energy giant Gazprom saying that it will cut gas supplies to Ukraine if its $400-million February bill is not paid by 8 March.

In January nearly 20 European countries were left without supplies of gas from Russia for around two weeks at the height of the winter.
 
This latest round of threat has come after Ukrainian gas company, Naftogaz said that it does not have the money to pay Gazprom for the gas supplied in February.

Last week Naftogaz had warned that it might not be in a position to clear the February bill as the utility companies, industry and households in Ukraine have not made payments to Naftogaz.

At Gazprom's board meeting held last week, it was decided that the company will once again have to resort to halting supplies to Ukraine from 8 March if the bills are not cleared by 7 March as ''fuel will not be supplied to Naftogaz free of charge'' a Russian newspaper reported quoted a Gazprom board member.

Russian Prime Minister Vladimir Putin had ordered the country's state-controlled gas giant Gazprom to cut off supplies to Ukraine on 1 January 2009 and later to Europe over Ukraine defaulting on $2-billion debt on gas supplied last year as well as failure to agree a delivery contract for 2009 (See: Putin cuts European gas supplies via Ukraine)

Russia supplies over one-quarter of its gas, 80 per cent of which is transported through Ukraine's pipeline system, to Europe.