13:15 28.01.2013

Zhirinovsky says free gas for Ukraine out of question

3 min read
Zhirinovsky says free gas for Ukraine out of question

Leader of the Liberal Democratic Party of Russia (LDPR) faction in Russia's State Duma, Vladimir Zhirinovsky, has said that there can be no talk of making natural gas supplies free of charge to Ukraine.

"There can be no talk of getting gas for free. Everyone has to pay for everything," Zhirinovsky said at a press conference entitled "Russia - Ukraine: Calculated European Neighborliness or Slavic Alliance?" at Interfax-Ukraine on Monday.

He added that the Soviet ideology that "someone feeds another one" is in the past. "One doesn't even have to help relatives anymore!" he said.

Zhirinovsky also said that in the current situation, Russia is not oppressing Ukraine, as it is just sticking to the agreement between the sides, and wants Ukraine to fulfill it as well.

"When an agreement is concluded it should be fulfilled, and if the sides fail to do this then another one should be signed," the Russian politician said.

Russia's gas company Gazprom earlier confirmed that it has sent a $7 billion bill to Ukrainian state oil and gas company Naftogaz Ukrainy for importing less natural gas last year than agreed.

The holding again said that the company on time and in full paid for the whole amount of natural gas under bills sent by Gazprom.

The holding also said that Naftogaz several times informed the Russian company that Ukraine plans to reduce purchases of natural gas in 2012.

Ukraine cut natural gas imports 26.5% (by 11.864 billion cubic meters (bcm)) in 2012 to 32.939 bcm. Almost all of that gas was delivered from Russia to Naftogaz Ukrainy and Dmitry Firtash's OstChem Holding, Ltd. (Cyprus).

Naftogaz Ukrainy imported 24.9 bcm of Russian gas under a contract with Gazprom last year and about 55 million cubic meters (mcm) under a reverse scheme contract with RWE of Germany.

Under the existing contract from January 19, 2009, Naftogaz is to buy 52 bcm of gas, with the least take-or-pay limit being 41.6 bcm. The contract also stipulates the reduction - on a mutually agreed basis - of the contracted volume of gas by a maximum of 20%, with agreement on this needing to be struck not later than six months before deliveries begin.

Naftogaz Ukrainy has negotiated with Gazprom over reducing the minimum amount of obligatory gas purchases to 27 bcm a year, but the parties have reached no agreement.

This agreement no longer suits Ukraine, which has attempted unsuccessfully to get its pricing parameters revised. Accordingly, the Ukrainian state holding intends to buy less Russian gas because of its cost and in November began using its gas-transport facilities in reverse to bring in gas from Europe.

In 2010, Naftogaz received a discount of $100 per thousand cubic meters (nullifying the Russian export duty) in exchange for the extension of the Russian naval fleet's presence in Crimea.

Despite the discount, the price for Russian gas for Ukraine in 2011-2012 was the same as or higher than the cost for several European countries, although delivering fuel to Ukraine is significantly less costly.

Buying gas in Europe last year cost Naftogaz Ukrainy less than buying it from Russia did. The country's state statistics service's figures indicate that the average price for gas imported from Germany last November cost the company $425 per thousand cubic meters, where the price for Russian gas was around $430.