26th Oct 2016

EU energy chief aims for Ukraine-Russia gas deal by end-May

  • Oettinger - A deal on how much Ukraine pays for Russian gas will be agreed next week (Photo: European Commission)

EU energy commissioner Gunther Oettinger has promised to try to resolve a gas price dispute between Russia and Ukraine by the end of May.

Speaking on Monday (19 May) after holding talks with Russian energy minister Alexander Novak and a representative of Gazprom, the state-owned energy giant, Oettinger promised that a compromise would be reached before the end of the month.

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"We have a timeframe that ends on June 1. We want to do all we can in two rounds of talks next week to clear up the open questions," he told German television.

He said progress had been made in recent days.

"We have in the last few days made progress on a number of issues but we still have no agreement," said Oettinger. The second round of talks between Novak and his Ukrainian counterpart Yuriy Prodan are set to take place in Berlin on 26 May.

At the core of the dispute is how much Ukraine owes for gas since last autumn as well as for future supplies. Ukraine relies on Russia for more than 50 percent of its gas needs and fears that Moscow may use the price dispute as reason to cut supplies

Gazprom is demanding $485 (€350) per 1,000 cubic metres, a figure which Oettinger has described as being well above the market rate. By comparison, Gazprom revealed earlier this year that it charged EU countries an average price of $387 per 1,000 cubic meters in 2013.

Ukraine has not paid for gas it imported in the last quarter of 2013 and the first four months of this year, and accuses Gazprom of nearly doubling its prices in a bid to put more pressure on its cash-strapped government which is trying to break free of Russia's influence.

For its part, Ukraine has offered Moscow $4 billion (€2.9 billion) to cover its bills up to and including May, based on the rate of $268.50 per 1,000 cubic meters which it had previously been charged.

"Somewhere in the middle would seem to be a fair result of negotiations," said the commissioner.

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