Ukraine rejects $7bn Gazprom bill for unused gas

Gazprom headquarters in Moscow, January 2013 Gazprom supplies much of the former USSR

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The Ukrainian government has rejected a $7bn (£4.5bn; 5.1 euros) bill from Russia's Gazprom for unused gas it was contracted to buy last year.

Energy Minister Eduard Stavitsky said there were "no grounds" to pay the money, which makes up nearly 4% of the country's GDP ($183bn).

Ukraine says it used 27bn cu m of Russian gas in 2012 but the contract stipulated payment for 52bn cu m.

The country is under pressure to join a customs union with Russia.

A long-running dispute between the two neighbours over energy supplies appeared to have been resolved by an agreement in 2009, but Ukraine has since complained that an exorbitant price was fixed.

Yulia Tymoshenko, who clinched the controversial agreement as prime minister, was tried and jailed for seven years in 2011 for having exceeded her powers in the deal.

However, her trial was viewed by many as a political move by her arch-rival, current President Viktor Yanukovych, who is now struggling to win support in the EU over the gas dispute.

'No support'

Gazprom sent its bill to Ukraine last month.

Speaking in Kiev on Thursday, Mr Stavitsky said: "We have replied that we do not deem it expedient to honour the $7bn bill, that is, to pay it because we have no reason to do so."

Start Quote

In the past three years we have had no support, even sympathy in the issues of the gas force majeure relations Ukraine has had”

End Quote Viktor Yanukovych Ukrainian president

On a visit to Lithuania on Wednesday, President Yanukovych criticised other European countries for failing to back Ukraine against Gazprom.

"In the past three years we have had no support, even sympathy in the issues of the gas force majeure relations Ukraine has had," he said.

Ukraine, he went on, had hoped to get some comments on the $7bn demand from the European Energy Community, a body which brings together EU and other European states including Ukraine, but not Russia.

"We repeatedly sent letters about this to the European Energy Community," he said. "Not once did we get a reply and this is a problem."

Russia has indicated to Ukraine that it can get gas at a lower price if it joins the customs union it set up with Kazakhstan and Belarus in 2010.

But a Russian foreign ministry official, Alexander Gorban, said last month that Ukraine ultimately had to choose between the Russian-led union or EU membership.

Gazprom has said its contract with Ukraine does not envisage unilateral changes in gas purchases and its CEO, Alexei Miller, warned last year it could take legal action if it was not paid.

Disputes over supplies to Ukraine before 2009 saw Gazprom temporarily cutting off supplies.

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