Putin says Ukraine flaming gas trade war

Russian Prime Minister Vladimir Putin on Friday accused Ukrainian President Viktor Yushchenko of creating gas trade problems, a day after a Russian official warned of a new gas war.

"The situation has... deteriorated unfortunately," Putin said in remarks broadcast on state television after talks with Ukrainian Prime Minister Yulia Tymoshenko during a visit to Kazakhstan capital Astana for a conference.

Putin said Yushchenko "considers the form of payment [for gas] unacceptable and nearly illegal".

"In such conditions and with such big risks we will hardly be in a position to solve the issues," he said.

Putin was referring to Yushchenko's opposition to a scheme under which payments for parts of Ukraine's Russian gas imports would come from Moscow's advance payments for transit via Ukraine.

Russia and Ukraine agreed on the scheme during Tymoshenko's meeting with Putin in Moscow last month.

Yushchenko has repeatedly accused Tymoshenko of selling out to Russia as part of a bitter rivalry that has split Ukraine's leadership.

Putin's warning comes after a Russian Government official told news agencies on Thursday that Russia and Ukraine could be on the brink of a new gas conflict if Kiev did not sort out its financial problems.

Kiev needs at least $4 billion (Dh14.6bn) to replenish its underground reservoirs in time for winter.

Earlier this year, Kiev asked Moscow for a loan of $5bn but the Russian financial ministry said this week the decision had not been made. Russian President Dmitry Medvedev said at Friday's EU-Russia summit that Russia and the EU should come up with a loan for Ukraine, and the Western bloc should come up with the bulk of the money. The European Union receives more than a quarter of its gas from Russia.

A pricing dispute between Russia and Ukraine was at the heart of a dispute that shut down gas supplies across Europe in January and caused severe shortages in eastern EU states.

 

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