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The fight betweem Gazprom and Ukraine is getting worse. It looks like the state-controlled Russian company is going to shut off all supplies to Ukraine starting tomorrow:

Ukrainian President Viktor Yushchenko rejected Russian President Vladimir Putin's proposal to delay a fivefold increase in natural gas prices for three months, likely leading OAO Gazprom to stop supplying the fuel to the former Soviet republic on New Year's Day.

"We can't accept a price of $230" per thousand cubic meters, Ukrainian government spokesman Valentyn Mondrievsky said in a telephone interview from Kiev less than two hours after Putin's offer was broadcast on Moscow-based Gazprom's NTV television network.

"We support Russia's proposal to switch gas prices to the market, but the price shouldn't look like economic pressure," Yushchenko said in an e-mailed statement.

State-run Gazprom, which supplies about one quarter of Ukraine's gas and uses the country's pipelines to supply a quarter of western Europe's, plans to shut off supplies to Ukraine at 10 a.m. tomorrow if the nation doesn't agree to pay $230 per thousand cubic meters, up from $50 now. The dispute pits Putin against Yushchenko, who is trying to orient Ukraine more toward western Europe in defiance of the Kremlin.

Update: Russia halts gas sales to Ukraine.

Posted by edelfenbein at December 31, 2005 6:10 PM