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Russia halts gas supplies to Ukraine

Russian gas firm Gazprom has confirmed it has halted gas supplies to Ukraine after a breakdown on pricing talks.

It comes a day after Ukraine’s state energy firm Naftogaz announced it was suspending gas purchases from Russia.

That announcement came after EU-brokered talks aimed at keeping supplies running for three to six months broke down without agreement.

Gazprom said it halted the supply because Ukraine did not make an “advance payment” for July’s delivery.

CEO Alexei Miller said Russia stopped delivering gas to Ukraine at 10:00 local time (07:00 GMT) on Wednesday.

“Gazprom won’t deliver gas to Ukraine at any price without prepayment,” he was quoted by Russian media as saying.

Price wars

Naftogaz said on Tuesday: “Since the additional agreement between Naftogaz and Gazprom is expiring on 30 June, and the terms of further Russian gas deliveries to Ukraine were not agreed at today’s trilateral talks in Vienna, Naftogaz is suspending purchases from the Russian company.”

The Ukrainian firm said it would continue transporting Russian gas supplies to other European customers.

It is the second time in a year that Russian fuel supplies have stopped running to Ukraine.

Russia cut off gas supplies in June 2014 as the conflict between the government in Kiev and pro-Russian rebels in the east of Ukraine escalated.

It also hiked prices after Ukraine’s Kremlin-backed leader Viktor Yanukovych wasousted in February 2014.

For the past year, the European Union, which mediated at the price negotiations in Vienna, has forged a series of temporary agreements that need to be renewed every three months.

Ukraine consumes about 50bn cubic metres (bcm) of gas per year, producing about 20bcm but importing the rest.

On average, Kiev experiences four months a year when the average temperature is below 0C.

The two countries have fought several gas price wars in past years with Russia cutting supplies in 2006 and in the winter of 2008-09.

Source: BBC

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