Russia will only deliver gas to Ukraine only if it pays in advance starting from next month, President Vladimir Putin said in a letter released today, raising the pressure on the struggling neighbour.
Putin first warned in April that Russia would do so, in a letter to European leaders whose nations are customers of Russian state-controlled Gazprom natural gas giant. He said Moscow would have to demand advance payment if Ukraine failed to start settling its mounting gas debt.
In the second letter released by the Kremlin today, Putin said that a meeting involving Russian, Ukrainian and the European Union officials has failed to settle the issue. Putin said that Ukraine's gas debt to Russia has kept rising and has reached USD 3.5 billion.
"Given the circumstances, the Russian company has issued an advance invoice for gas deliveries to Ukraine, which is completely in accordance with the contract, and after June 1 gas deliveries will be limited to the amount prepaid by the Ukrainian company," Putin said in the letter.
The move is part of Russia's efforts to retain control over its struggling neighbour, which has been teetering on the verge of financial collapse and facing a mutiny in the east, where pro-Russian separatists seized administrative buildings, fought government troops and declared two regions independent following Sunday's referendum.
Putin sought to cast the move as a purely economic decision, saying that Russia is "still open to continue consultations and work together with European countries in order to normalise the situation."
"We also hope that the European Commission will more actively engage in the dialogue in order to work out specific and fair solutions that will help stabilise the Ukrainian economy," he added.
Ukraine has said it could start paying off the debt if Moscow restores the gas discounts cancelled following the ouster of pro-Russian president in February after months of protests.
