Ukraine has rejected Russia’s latest gas price hike and threatened to take its energy-rich neighbour to arbitration court over a dispute that could imperil deliveries to western Europe.
Prime Minister Arseniy Yatsenyuk said on Saturday that Russia’s two rate increases in three days were a form of “economic aggression” aimed at punishing Ukraine’s new leaders for overthrowing a Moscow-backed regime last month.
Russia’s natural gas group Gazprom this week raised the price of Ukrainian gas by 81 per cent – to $US485.50 ($A527.32) from $US268.50 for 1000 cubic metres – requiring the ex-Soviet state to pay the highest rate of any of its European clients.
The decision threatens to further fan a furious diplomatic row between Moscow and the West that has left Kremlin insiders facing sanctions and more diplomatic isolation than at any stage since the 1989 fall of the Berlin Wall.
The profound scale of the rift between those who see their future tied to either Europe or the Kremlin was underscored when security agents announced the arrest of 15 men who allegedly planned to distribute 300 machine guns for the armed overthrow of the local government of a region neighbouring Russia.
Yatsenyuk said Ukraine must now prepare for the possibility that “Russia will either limit or halt deliveries of gas to Ukraine” in the coming weeks or months.
Gazprom supplies about a third of EU nations’ demand, despite efforts by Brussels to limit energy dependence on Russia over its crackdown on domestic dissent and increasingly militant foreign stance.
Ukrainian Energy Minister Yuriy Prodan said Kiev was ready to take Gazprom to arbitration court in Stockholm if Moscow refused to negotiate over a lower price.
But Gazprom said it was simply reverting back to the price set in a 10-year contract that Ukraine had signed in 2009.
The budding gas war adds another layer of concern to a crisis that has seen Russia mass tens of thousands of troops along Ukraine’s eastern border and ignore Western pressure to cede its claim on Crimea.
The US has responded by boosting NATO’s defence of eastern European nations, while European leaders have said they are ready to impose broader economic sanctions against Russia if it pushed any harder against Ukraine.