Gazprom mulls fresh gas cuts to Ukraine

Moscow - Russian gas export monopoly Gazprom warned it could again cut supplies to Ukraine in early March over 400 million dollars in new debt, a Russian newspaper reported Thursday.

Kommersant daily said new cuts were discussed at a board of directors meeting this week after Ukraine failed to pay for February supplies, an unnamed participant told the paper.

"If 400 million dollars is not paid on March 7, then on March 8 we will again have to cut off the gas to Ukraine," the insider quoted the head of Gazprom's finance department, Andrei Kruglov, as saying at the meeting.

Russia halted gas deliveries to Ukraine on New Year's over a pricing dispute and non-payments, the move starved Europe of gas supplies for near two weeks at the height of winter.

Europe depends on Russia for over one-quarter of its gas supplies, 80 per cent of which travel through Ukraine's pipeline system.

Gazprom renewed gas flows to Europe on January 19 only after the highest level talks between the countries' prime ministers and under overwhelming pressure from European leaders facing their worst ever energy crisis.

Last week, Ukraine's Naftogaz warned it was hard up to pay for supplies due to wide-spread defaulting by its domestic clients on utilities bills.

Kiev has stood its ground against Gazprom's attempts to seek other forms of payment, such as a stake in the Ukraine's strategic pipeline network.

But the country, reeling from the financial crisis, risks losing out on part of a 16.4-billion-dollar IMF loan for non-compliance with budgetary demands. (dpa)

Business News: