The Russian Gas monopoly Gazprom intends to take action in order to force The Ukraine to pay for gas and stop the country from exporting it to Europe.

Russian deputy Prime Minister Viktor Khristenko has reported that gas deals between the two CIS members are to be radically revised and a new payment procedure is to be introduced soon. By October 1st this year, the Russian government will have prepared a set of documents regulating gas transactions between the two states. Judging from the published excerpts from those documents, Russia will no longer tolerate The Ukraine’s non-payment and gas theft. Firstly, to stop gas deliveries through The Ukraine would mean loosing lucrative contracts with Germany. Secondly, Kiev has cunningly managed to use Gazprom’s and the Russian authorities’ interests to suit its own ends, by promising the Kremlin that The Ukraine could delay its bid to enter NATO. The Russian authorities willingly bought these promises. Politics aside, there were also economic reasons for Russia’s lenience towards The Ukraine. Gazprom has always acted as a private legal entity, although the Russian government holds a 41% stake in the gas giant. However, Gazprom continuously delayed tax payments, omitted dividends, and state representatives were given a disproportionately low share of the seats on Gazprom’s board of directors. The government therefore did not take great pains to defend Gazprom’s interests. Russia also insists that The Ukraine should stop illicit gas deliveries to Europe. The problem is that The Ukraine purchases Russian gas on favorable terms, regularly delays payments to Gazprom and then resells gas at high European prices, thus disrupting the stability of European gas supplies.