EU Negotiates Ukraine to Pay Russia If Further Prices Are Fair

Ukraine must make a down-payment to Russia for gas and in return Moscow must offer a fair price for further deliveries, Europe’s Energy Commissioner Guenther Oettinger said ahead of talks with the Russian and Ukrainian energy ministers in Berlin on Friday.

Oettinger is acting as mediator in the talks, which on Monday saw the two governments agree to study his proposal that Ukraine pay Russia $2 billion by Thursday and a further $500 million by June 7.

The commissioner told German radio station Deutschlandfunk it was now clear how much gas Russia delivered to Ukraine between November and the end of May.

“The price for the months of January, February, and also now, is disputed so Ukraine has to explain today that it will make or has already made a first payment, a significant amount, a high three-digit million amount in dollars,” he said.

“(That is) so that it’s clear it is prepared to accept payment obligations; those who get gas must pay,” he added.

Oettinger said the price of $485 per 1,000 cubic metres of gas that Russia is demanding was “unacceptable”, not in line with market conditions and determined by politics. Ukraine insists on a price of $268.50 per 1,000 cubic meters.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza