Ukraine has decided to ban all Russian planes from using its airspace after exports of Russian gas to Ukraine have been halted by state-controlled giant Gazprom.
The decision was announced by Ukrainian PM Arseniy Yatsenyuk at a televised government meeting.
Gazprom said it had halted gas deliveries to Ukraine because it had used up all the gas it had paid for.
Ukraine said it had stopped buying from Gazprom because it could get cheaper gas from Europe.
The airspace ban applies to military planes as well as civil airliners.
PM Arseniy Yatsenyuk said: “The Ukrainian government has decided to ban all transit flights for all Russian airlines in Ukraine’s airspace.
“The government is instructing [aviation authority] Ukraerorukh, in line with the norms of international law, to inform the Russian Federation that Russian airlines and Russian aircraft do not have the right to use Ukraine’s airspace any longer.”
Following previous clashes over gas supplies, the two countries had agreed that Ukraine would pay for its gas in advance.
Gazprom CEO Alexei Miller said on November 25 that Ukraine had already used up all the gas it had paid for.
In a statement, Alexei Miller said that “deliveries have been stopped until the receipt of new payments from the Ukrainian company.
“The refusal to buy Russian gas will create serious risks for the reliable transit of gas to Europe through Ukraine and for the supply of gas to Ukrainian consumers during the upcoming winter,” he added.
However, Arseniy Yatsenyuk dismissed Alexei Miller’s comments out of hand.
The prime minister said his government had decided to stop buying gas from Russia as it could get a better deal elsewhere.
“The government has made the decision to order [Ukraine’s national oil and gas company] Naftohaz to stop buying Russian gas.
“They got it all wrong. It is not them who are not supplying gas to us, it is us who are not buying gas from them. This is being done because offers that have come from our European partners – price offers – are much better than the offers from our eastern neighbor.”
Russia cut off gas to Ukraine in June 2014 as the conflict between the government in Kiev and pro-Russian rebels in eastern Ukraine escalated.
However, it resumed them following the pre-payment deal.
About 15% of gas used in Europe travels through Ukraine. The EU has been holding talks aimed at keeping supplies running between the two sides.
Vladimir Putin’s former aide Mikhail Lesin has been found dead in a hotel in Washington DC, Russian state media say.
Mikhail Lesin, 57, Russia’s former press minister and a one-time head of the powerful Gazprom-Media Holding group, died on November 5, the RIA-Novosti and Tass news agencies report.
Russian media, quoting Mikhail Lesin’s family, said he suffered a heart attack.
According to the Washington Post, Mikhail Lesin’s body was found in a room at the Dupont Circle hotel.
Police are investigating the Russian’s death.
In 2014, Mississippi Senator Roger Wicker called for an investigation into Mikhail Lesin, saying his fortune “raises serious questions”.
In a letter to the US Department of Justice, Senator Roger Wicker said Mikhail Lesin bought a $28 million property in Los Angeles for his family after finishing work as a civil servant.
Roger Wicker asked how a former civil servant would have been able to buy and maintain expensive property, and expressed concern their purchase may have involved people and groups on a US sanctions list.
Mikhail Lesin was for a long time considered one of the most influential figures in the Russian media market and in the corridors of power.
He worked as an aide to the Russian presidency between 2004 and 2009, when he helped advise on the creation of the news channel Russia Today.
President Vladimir Putin hailed “the enormous contribution made by Mikhail Lesin to the formation of modern Russian media”, according to Tass.
In 2014, Mikhail Lesin was accused of trying to force a radio station in which he was a shareholder to cut an interview with opposition figure Alexei Navalny.
Roger Wicker’s letter said Mikhail Lesin “led the Kremlin’s effort to censor Russia’s independent television outlets”.
Mikhail Lesin, who resigned from Gazprom-Media in 2014, leaves a wife, son and daughter, the Ria-Novosti agency said.
Russian energy giant Gazprom has been charged by the European Commission with abusing its dominant market position in Central and Eastern European gas markets.
The EC said its preliminary view was that Gazprom was breaking EU anti-trust rules.
It added the company may have limited its customers’ ability to resell gas, potentially allowing it to charge unfair prices in some EU member states.
Gazprom rejected the EC’s objections, calling them “unfounded”.
“Gazprom strictly adheres to all the norms of international law and national legislation in the countries where the Gazprom Group conducts business,” the company said in a statement.
The company now has 12 weeks to respond to the Commission’s allegations.
The move could further sour relations with Moscow, which are already strained over the Ukraine crisis.
Brussels began investigating Russian state-controlled Gazprom in 2012, but Moscow says the Commission’s allegations are politically motivated.
The EU’s new anti-monopoly chief, Margrethe Vestager, said the Commission had found that Gazprom “may have built artificial barriers preventing gas from flowing from certain Central European countries to others, hindering cross-border competition.
“Keeping national gas markets separate also allowed Gazprom to charge prices that we, at this stage, consider to be unfair.
“If our concerns were confirmed, Gazprom would have to face the legal consequences of its behavior.”
Brussels’ competition authority has the power to impose fines of up to 10% of Gazprom’s global turnover.
The EC questioned the formulae Gazprom used to come up with the different prices at which it sold gas to individual countries.
“Gazprom’s specific price formulae, which link the price of gas to the price of oil products, seem to have largely favored Gazprom over its customers,” it said.
The Commission said that, in its preliminary view, Gazprom was hindering competition in the gas markets in eight Central and Eastern European member states – Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.
Russia supplies about a third of the EU’s gas requirements, with half that amount going through pipelines that cross Ukraine.
Thousands of people have protested in the Hungarian capital, Budapest, ahead of talks between PM Viktor Orban and Russian President Vladimir Putin.
Today’s visit is Vladimir Putin’s first to an EU leader since June 2014.
Hungary wants to negotiate a new agreement for Russian gas supplies.
Russia has been largely shunned by EU member states because of the conflict in eastern Ukraine, although it denies accusations of fomenting the violence.
Protesters rallied in Budapest on Monday night carrying banners saying “Putin No! Europe Yes!”.
Much of the city centre was closed to traffic on February 17 as security was stepped up ahead of the visit.
Vladimir Putin’s trip comes less than two weeks after German Chancellor Angela Merkel visited Budapest before embarking on a week of intense diplomacy, which resulted in the announcement of a ceasefire in eastern Ukraine.
He is keen to demonstrate that he has allies within the EU and NATO, observers say.
During his visit, Vladimir Putin is due to visit the graves of Soviet soldiers.
Hungary has backed EU sanctions imposed on Russia over the situation in Ukraine, but has been vocal about their negative impact.
In 2014, Viktor Orban said the EU had “shot itself in the foot” by restricting trade with Moscow.
Hungary relies on Russia for more than half of its gas supplies and wants to negotiate a flexible long-term deal to succeed the current agreement which expires later this year.
Viktor Orban, who rose to prominence with a strong anti-communist and anti-Russian stance as a student leader, told Hungarian radio on Friday that there were psychological tensions with Russia, but he wanted to overcome them.
He is considered to be among Vladimir Putin’s closest allies in Europe.
Many of the demonstrators who marched through Budapest on the eve of Vladimir Putin’s visit said they were wary of closer ties with Russia.
Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations, Ukrainian Energy Minister Yuri Prodan said.
“Gas supplies to Ukraine have been reduced to zero,” he said.
Russia’s state-owned gas giant Gazprom said Ukraine had to pay upfront for its gas supplies, after Kiev failed to settle its huge debt.
Gazprom had sought from Kiev $1.95 billion – out of $4.5 billion it says it is owed – by 06:00 GMT.
Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations
The Russian firm said it would continue to supply gas to Europe.
Russia-Ukraine ties remain tense since Moscow annexed Crimea in February.
Kiev says Moscow backs separatists in the east of the country. Russia denies the charge.
“Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies,” Gazprom said in a statement on Monday morning.
“From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for.”
Moments later, both Gazprom and Ukraine’s state-owned Naftogaz company filed lawsuits against each other in the Stockholm arbitration institute.
Gazprom said it wanted to recover $4.5 billion from Naftogaz, which is dealing with gas supplies to Ukraine. Meanwhile, Naftogaz said it was seeking to recover $6 billion in “overpayment” for gas since 2010.
Russian PM Dmitry Medvedev said Ukraine’s position on the issue “smacks of blackmail”.
The latest moves follow crisis talks between Ukraine, Russia and the EU on the issue.
“We reached no agreement. The chances that we meet again are slim,” Gazprom spokesman Sergei Kuprianov said after the latest round of the talks ended in Kiev over the weekend.
Ukraine’s PM Arseniy Yatsenyuk has called on Russia to control its border to stop “terrorists” from crossing into his territory.
Arseniy Yatsenyuk said Kiev could solve the crisis quickly if Moscow stopped meddling in the situation.
Russian Foreign Minister Sergei Lavrov warned that Kiev’s policies were pushing Ukraine into “fratricidal war”.
Ukraine’s PM Arseniy Yatsenyuk has called on Russia to control its border to stop terrorists from crossing into his territory
Earlier this week rebels and government forces were embroiled in some of the worst fighting of the crisis so far.
The separatists say they lost up to 100 fighters as they tried to seize Donetsk airport from pro-Kiev forces.
Ukraine’s interior ministry says the military is now in full control of the airport, although gunfire was reported in Donetsk itself on Wednesday.
Speaking on a visit to Germany, Arseniy Yatsenyuk said the situation in the east was deteriorating and Russia’s involvement was causing huge difficulties.
“A number of trucks full of live ammunition, full of Russian-trained guerrillas crossed the Russian border into Ukraine,” he said.
“We ask Russia and Putin to block the border to Ukraine. If Russia is out of this game we can handle this situation in a week.”
Meanwhile, the Organization for Security and Co-operation in Europe (OSCE) said it had re-established contact with a monitoring team it reported lost in eastern Ukraine on Tuesday, but it continued to refer to the group as “detained” and their fate is unclear.
UN Secretary General Ban Ki-moon has called newly elected President Petro Poroshenko to congratulate him on receiving a “strong mandate” to govern.
Moscow had criticized the election because many in the east were unable to vote as a result of the unrest.
But analysts say the election has bolstered the confidence of Ukrainian officials in their dealings with Moscow.
On Tuesday, Arseniy Yatsenyuk denied Moscow’s long-standing claim that Ukraine owed billions of dollars in unpaid gas revenues.
The prime minister said that in fact Russia’s state-owed Gazprom owed Ukraine $1 billion in compensation for natural gas seized in the annexation of Crimea.
Gazprom’s chief executive Alexei Miller said on Wednesday that Ukraine had used $1.7 billion worth of gas in May alone, and would owe $5.2 billion by June 7.
Ukraine has threatened to take Russia’s Gazprom to court over what it says are inflated gas prices if the company refuses a new payment deal.
Ukraine’s PM Arseniy Yatseniuk, said Kiev was ready to pay $268 per 1,000 cubic metres of gas and settle its $2.2 billion debt with Gazprom if it agreed to the price.
Gazprom has so far declined to comment.
Russia almost doubled Ukraine’s gas price after the toppling of President Viktor Yanukovich in February.
Ukraine has threatened to take Russia’s Gazprom to court over inflated gas prices (photo AFP)
PM Arseniy Yatseniuk has said his country is not willing to pay at those levels.
“We insist that the price set for Ukraine at the beginning of 2014 [$268 dollars per 1,000 cubic metres] is a market one,” he added.
“We insist on the continuation of this price.”
Ukraine’s state gas company, Naftogaz, has started the process of taking Gazprom to an arbitration tribunal in Stockholm if the Russian state-controlled firm does not agree to the offer within 30 days, Arseniy Yatseniuk said.
Meanwhile, Ukraine’s interim prime minister announced another gas deal that allows supplies from Central Europe to reach the country via Slovakia.
Under the agreement, signed on Monday, Slovakia will reinstate a disused pipeline capable of supplying three billion cubic metres of gas a year to Ukraine.
Ukraine’s energy minister, Yuri Prodan, said the country would soon start gas import talks with Hungary, as it tries to reduce its reliance on Russia, which accounts for about half of its total supply.
In a letter to European leaders, President Vladimir Putin has warned Europe that Ukraine’s delays in paying for Russian gas have created a “critical situation”.
Pipelines transiting Ukraine deliver Russian gas to several EU countries and there are fears that the current tensions could trigger gas shortages.
Armed pro-Russian separatists are holed up in official buildings in Donetsk and Luhansk, in eastern Ukraine.
Meanwhile, a European human rights body has stripped Russia of voting rights.
The Parliamentary Assembly of the Council of Europe (PACE) monitors human rights in 47 member states, including Russia and Ukraine.
Protesting against Russia’s annexation of Crimea last month, PACE suspended Russia’s voting rights as well as Russian participation in election observer missions.
The Russian delegation had boycotted the meeting. Its leader, Alexei Pushkov, described the proceedings as a “farce”.
Vladimir Putin has warned Europe that Ukraine’s delays in paying for Russian gas have created a critical situation
Russian state gas giant Gazprom says Ukraine’s debt for supplies of Russian gas has risen above $2 billion (1.4 billion euros).
Gazprom said on Wednesday it could demand advance payments from Kiev for gas but President Vladimir Putin said the company should hold off, pending talks with “our partners” – widely believed to mean the EU.
President Vladimir Putin warned that the “critical” situation could affect deliveries of gas to Europe, his spokesman Dmitry Peskov was quoted as saying.
Vladimir Putin suggested “special” measures, he added, without elaborating. Nearly one-third of the EU’s natural gas comes from Russia.
Previous Russian gas disputes with Ukraine have led to severe gas shortages in several EU countries. The EU says it has extra gas supplies and reverse-flow technology to deal with any such disruption now.
In Kiev, the authorities said Ukraine would not prosecute pro-Russian activists occupying official buildings in Donetsk and Luhansk if they surrendered their weapons.
Ukraine has accused Russia of stirring up the unrest, a claim Moscow denies.
NATO says up to 40,000 Russian troops are massed near Ukraine’s border.
Ukraine fears that the Russian separatist actions are a provocation similar to the protests that gripped Crimea days before Russian troops annexed the peninsula last month.
The separatists in the east – a mainly Russian-speaking region with close ties to Russia – are demanding referendums on self-rule. In Donetsk they have declared a “people’s republic”.
Russia, the US, Ukraine and the EU are to hold talks in Geneva next Thursday to try to resolve the impasse, EU diplomats have said.
They will be the first four-way talks since the crisis began.
Russian Foreign Minister Sergei Lavrov told US Secretary of State John Kerry by telephone on Wednesday that the meeting should focus on fostering dialogue among Ukrainians and not on bilateral relations among the participants.
In another development, President Vladimir Putin sacked 14 generals, Russian media report.
It was not immediately clear if the move was a routine step. Russia has some 800 generals in its army alone.
Ukraine’s interim government has decided to raise gas prices for domestic consumers by 50% in an effort to secure an International Monetary Fund (IMF) aid package.
An official at Ukraine’s Naftogaz state energy company said the price rise would take effect on May 1st, and further rises would be scheduled until 2018.
Ukrainians are accustomed to buying gas at heavily subsidized rates.
But the IMF has made subsidy reform a condition of its deal.
Ukraine currently buys more than half of its natural gas from Russia’s Gazprom, and then sells it on to consumers at below market prices.
Ukraine’s interim government has agreed to raise gas prices for domestic consumers by 50 percent
Yury Kolbushkin, budget and planning director at Naftogaz, told reporters that gas prices for district heating companies would also rise by 40% from July 1st.
IMF negotiators are still in Kiev to negotiate a package of measures worth billions of dollars to help Ukraine’s interim government plug its budget deficit and meet foreign loan repayments.
The IMF is also asking Ukraine to crack down on corruption and end central bank support for the Ukrainian currency.
On Tuesday, Ukraine’s finance minister Oleksandr Shlapak said the country was seeking $15-20 billion from the IMF.
The Financial Times has reported that a rescue package worth about $15 billion is close to being agreed, and could be announced as early as Thursday.
An agreement with the IMF is necessary to unlock further financial support from the EU and US.
Financial help is urgently required as Ukraine has been forced to plunder its foreign currency reserves, and the economy is expected to contract by 3% this year, according to the country’s finance ministry.
In the US, arguments in Congress over reforms to the IMF have held up plans to offer Ukraine $1 billion in loan guarantees.
The EU says its financial support, potentially worth 1.6 billion euros is contingent on the IMF deal being agreed.
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