Putin taps Ukraine over gas payment dispute, assures Europe of gas supply

President Vladimir Putin on Friday called Ukraine's failure to pay for Russian gas supplies unacceptable, demanding the latter fulfills earlier commitment, while offered assurances that Moscow would honor its gas contracts with European clients. During a meeting with the National Security Council, Putin criticized Ukraine for failing to pay for discounted gas price in recent few months. "The first quarter of this year saw the lowest prices, but the Ukrainian partners failed to pay even at these prices. April 7 marked yet another date for payments under the gas contract for March 2014, of the 540 million dollars not a single dollar has been paid, zero," Putin said, calling the situation as "absolutely unacceptable." Ukraine's direct debt to the Russian gas monopoly Gazprom has exceeded 2.2 billion dollars and kept growing, Russian Ministry for Economic Development said in early April. In 2010, Russia and Ukraine signed a gas-for-fleet agreement, under which Moscow offered a discount for gas in exchange for extending its lease of the Black Sea Fleet in Crimea for another 25 years. Earlier this month, the Kremlin said the pact was no longer valid as Crimea joined Russia after a referendum last month. Moscow later set the price of gas to Ukraine at 485 U.S. dollars per 1,000 cubic meters, a sharp hike from 268.5 dollars agreed last December. In response, Ukraine on Friday said it could not agree to the natural gas price offered by Russia. And Kiev is currently "in intensive negotiations" with the European Commission on the reverse gas supplies," and is looking for gas supplies from other European countries, said Ukrainian Minister of Energy and Coal Industry Yuri Prodan. While giving Ukraine the cold shoulder, Putin assured Europe that Russia would stick to its obligations on gas supply. "This is not a question of ours. This is a question of securing Ukrainian transit," he noted. "Russia is acting very neatly, very considerately and respectfully towards our partners. We will certainly guarantee in full the honoring of all our obligations to our European consumers." Meanwhile, Putin chided the United States for commenting on a letter he has sent to the European Union's leaders, which he said was not intended for Washington's eyes. In his letter, Putin called on the EU leaders to jointly hold urgent consultations over Ukraine's economy and said it was vital to hold urgent consultations to stabilize Ukraine's economy and ensure delivery and transit of Russian gas. He said that Russia's lost profit of its natural gas supplies to Ukraine has reached 35.4-billion-dollar since 2009 due to discounted prices. On Friday, the U.S. State Department said Russia must not politicize its gas affairs with Ukraine and must stick to the market price formation. Putin, calling the U.S. reaction strange, said the letter was not written to Washington but to European gas consumers. "Looking over someone's shoulder is not nice at all," he said. Kremlin said Moscow cannot understand why the United States judges if the price for Russian gas is fair, as Washington has nothing to do with the European gas market. "The principal issue is not the price (for gas) but the debt," Kremlin spokesman Dmitry Peskov told reporters. That situation might in future negatively affect Russian gas transit to Europe, Peskov warned. Russia, Ukraine, the United States and EU plan to hold joint talks in Geneva on April 17 about ways of solution to the political and economic crisis in Ukraine.