Russia begins cutting off gas supply to Ukraine
Russia today began cutting off gas to Ukraine in a dispute that could hit deliveries to Europe on the very day that Moscow began its first term as chairman of the Group of Eight industrialized nations.
The Russian state-owned supplier, Gazprom, said it had begun reducing pressure in the pipeline supplying Ukraine after Kiev refused to pay the increased price Moscow was demanding.
"In this situation, which is the fault of the Ukrainian side, we have been forced to start reducing pressure in the pipeline to Ukraine," Gazprom spokesman Sergei Kupriyanov told a news briefing.
Gazprom supplies 25 per cent of western Europe's gas - most via Ukraine. It insisted deliveries to western Europe would not be affected but Italy's gas importer said Gazprom had warned it that disruption was possible.
Though Russia says it is purely a business dispute, the gas cut-off has fed concern from Washington to Berlin that the Kremlin is prepared to use its control over its massive energy resources as a political weapon.
Ukraine's Western-leaning president, Viktor Yushchenko, has irked many in Moscow by trying to take his ex-Soviet state on Russia's western border into Nato and the European Union.
That, say Ukrainian officials, is why the Kremlin is punishing Ukraine with such a huge price increase while letting more Moscow-friendly ex-Soviet states such as Belarus go on paying far less for Russian gas.
Moscow took over the rotating G8 chairmanship for the first time from Britain on New Year's Day, and its tenure is certain to come under intense international scrutiny.
Gazprom's decision to start cutting gas pressure effectively means the Russian gas allotted for Ukraine's consumption is being taken out of the pipeline system.
Moscow insists this will leave enough gas to continue supplying western Europe as normal - provided Ukraine does not dip into supplies being pumped further afield. Eighty percent of Russian gas exports to western Europe pass through Ukraine.