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Ukraine has rejected a Russian request to pre-pay its gas bills starting in June, the move being likely to affect transit gas deliveries across the country further West.

Prime Minister Arseniy Yatsenyuk published his letter to the EU Commissionon the Ukraine government website, in which he expresses disappointment over the refusal of Russia to reconsider its politically motivated price of gas sold to his country.

Twice in the past decade, price disputes between Moscow and Kyiv have led to reduced supplies of Russian gas to European clients via Ukraine, a conduit for about half the gas Europe imports from Russia.

Ukraine wants to change the conditions of a 2009 contract that locked Kyiv into buying a set volume, whether it needs it or not, at $485 per thousand cubic metres (tcm) - the highest price paid by any client in Europe. Ukraine proposes the price to be fixed at $268.5 per tcm. After signing the agreement, Ukraine says it will pay the existing debt to be paid off to the Russian side within 10 days.

But as Russia has refused to change the price, Ukraines Prime Minister writes that the pre-payment issue cannot be included into the agenda of the contractual relations.

The Ukrainian party promotes a strong message that provoking of a new gas crisis and attempts to discredit the reliability of a transit route via Ukraine are aimed exceptionally at construction of the Southern Flow gas pipeline, which, instead of ensuring diversification and strengthening of energy independence of the EU, is to bypass the territory of Ukraine as a transit country, Yatsenyuk writes.

In the absence of an agreement, Ukraine says it will take the issue to the Arbitration Institute of the Stockholm Chamber of Commerce.

Apparently, Ukraine and Moscow make the effort to publish their correspondence online to avoid carrying the blame in vas gas stops flowing to Europe.

On 15 May, Russian President Vladimir Putin published his letter to the leaders of European countries to which Russia sells gas. The recipients of the letter are the leaders of Austria, Bosnia and Herzegovina, Bulgaria, Czech Republic, Croatia, France, Germany, Greece, Hungary, France, Italy, Macedonia, Moldova, Poland, Romania, Serbia, Slovakia, Slovenia and Turkey.

Putin says that the situation with payments for Russian gas only got worse following a trilateral meeting in Warsaw on 2 May involving Russian energy minister Alexander Novak, his Ukrainian colleague Yuri Prodan and Energy Commissioner Gnther Oettinger [read more].

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Ukraine-Russia payment dispute augurs new gas crisis