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Gazprom cuts Ukraine gas supply Gazprom cuts Ukraine gas supply
(about 2 hours later)
Gazprom, Russia's gas monopoly, has cut supplies to Ukraine by 25% after talks between the two sides ended in failure.Gazprom, Russia's gas monopoly, has cut supplies to Ukraine by 25% after talks between the two sides ended in failure.
State-owned Gazprom claims it is owed $1.5bn (£770m) in arrears, and that efforts to get Ukraine to pay off the debts had "reached a dead end". State-owned Gazprom claims it is owed $1.5bn (£770m) in arrears, but Ukraine officials say the debt has been paid.
A previous row between the two sides saw Russia cut gas to Ukraine in 2006, also hitting exports to Western Europe.A previous row between the two sides saw Russia cut gas to Ukraine in 2006, also hitting exports to Western Europe.
Gazprom reassured European consumers that their gas supply would not be affected by the current problems. The European Commission has called on the two sides to settle the dispute despite Gazprom's pledge that gas supply to Europe would not be affected.
"Gas deliveries to European consumers will go on in full amount," said Gazprom spokesman Sergei Kupriyanov. "The commission has called (on) the two parties to find quickly a definitive solution to this commercial issue," said Commission spokesman Michele Cercone.
"Gazprom is ready to continue talks with Ukrainian officials," he said. "We continue to monitor closely the development of this situation," he added.
Earlier, the European Commission said it had been assured by Gazprom that supplies to the European Union will not be impacted. Gazprom spokesman Sergei Kupriyanov said: "Gas deliveries to European consumers will go on in full amount."
He added that Gazprom was prepared to continue negotiations with Ukrainian officials.
StalemateStalemate
Last month, Russian President Vladimir Putin and Ukraine's Viktor Yushchenko reached an outline deal, but the details could not be agreed.Last month, Russian President Vladimir Putin and Ukraine's Viktor Yushchenko reached an outline deal, but the details could not be agreed.
Ukraine's deputy prime minister said the money owed had already been transferred and that documents to confirm this had been sent to Gazprom.Ukraine's deputy prime minister said the money owed had already been transferred and that documents to confirm this had been sent to Gazprom.
But Gazprom's Mr Kupriyanov maintained that the problem had not been resolved.But Gazprom's Mr Kupriyanov maintained that the problem had not been resolved.
"Gazprom is a reliable supplier of energy resources, but we cannot and should not deliver gas without payment," he said in a statement."Gazprom is a reliable supplier of energy resources, but we cannot and should not deliver gas without payment," he said in a statement.
Continued tensions?
The gas cut came hours after Gazprom chairman Dmitry Medvedev won the Russian presidential election with the support of President Vladimir Putin.The gas cut came hours after Gazprom chairman Dmitry Medvedev won the Russian presidential election with the support of President Vladimir Putin.
The Kremlin has tightened its grip on Russia's oil and gas supplies and used this control to help create an economic boom in the country.The Kremlin has tightened its grip on Russia's oil and gas supplies and used this control to help create an economic boom in the country.
Valery Nesterov from Troika Dialog stock brokers said he doubted the tense relationship between Moscow and the pro-Western Ukrainian government would change under Mr Medvedev's rule.
"Clearly, the Russia-Ukraine gas relationship, which was already on the rocks, began to deteriorate sharply last month," he said.
He observed the unresolved problems include "Ukrainian debts to Gazprom, gas prices, the marketing scheme for gas, re-exports of Russian gas and more importantly the broader geopolitical disagreements between the two countries".