Russia steps up gas pressure on Ukraine

Russia threatened to fine Ukraine on Tuesday for failing to buy enough gas in the first quarter, increasing pressure on its neighbour at a time when the World Bank said Kiev’s economy was contracting fast.

Alexei Miller, chief executive of Russia’s state-run gas giant Gazprom (GAZP.MM), told Reuters the corporation was in talks with Ukrainian counterparts over possible sanctions over lower than agreed gas imports.
“We are discussing this with our Ukrainian colleagues. This is spelt out in our agreements,” he said.

The threat dealt a further blow to Ukraine, which is facing growing anger sparked by the authorities’ handling of the economic crisis and political wrangling over the date of the next presidential election.

Gazprom had previously said it would not impose fines, in recognition of Ukraine’s dire financial plight.

Russia’s apparent rethink comes after Ukraine’s leaders — squeezed between traditional loyalty to former Soviet master Moscow and a desire to move closer to the West — angered the Kremlin by signing an agreement in Brussels to overhaul Ukraine’s ageing pipeline network.

Reuters