Ukraine is Head Over Heels in Debt for Russian Gas

Naftogaz Ukraine must pay $29 billion to Russia’s Gazprom.

The total debt of Naftogaz, Ukraine's national oil and gas company, to Russian gas giant Gazprom is estimated at over $29 billion, Gazprom head Alexey Miller said.

Miller said during a meeting of the European Business Congress (EBC) in Belgrade:

"The total debt of Ukraine in relation to penalties ‘Take or Pay' equals to $29 billion and 477 million, from which $2 billion and 604 million is the debt for gas supplies during 2013-2014 plus penalties. $200 million is for the supply of gas to eastern Ukriane for which Naftogaz Ukraine won't pay."

According to Miller, the rest of the amount is Ukraine's penalties from 2012, 2013 and 2014.

Earlier this month, it was reported that Ukrainian demand for Russian gas increased twofold. Gazprom delivered 261 million cubic meters of gas to Ukraine over the period of April 1-27, with the country using almost 10 million cubic meters of gas per day.

Last summer, Gazprom transferred Ukraine to a prepayment system for gas deliveries due to latter's immense debt, surpassing $5 billion at the time.