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    Barroso Guarantees Poroshenko Financial Aid in Case of Gas Price Hike

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    Russia-Ukraine Gas Conflict (292)
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    According to the letter from the European Commission's President Barroso to Ukrainian President Poroshenko, the EU guarantees financial aid to Ukraine if the price of Russian gas rises.

    KIEV, October 31 (RIA Novosti) – European Commission chief Jose Manual Barroso has assured President Petro Poroshenko that the Commission would provide financial support to Ukraine if Russia hikes up the gas prices, the Ukrainian cabinet said in a statement Friday.

    "The results of the talks [in Brussels] were set in the following documents… a letter from President of the European Commission Barroso to Ukrainian President Poroshenko, reaffirming European Commission's guarantees of financial support to Ukraine in case Russia does not fulfill its obligations with regard to gas prices," the statement, released on the cabinet's website, said.

    During the final round of months-long gas talks, Russia and Ukraine signed on Thursday a so-called "winter package" agreement that will see Russia resume its natural gas deliveries to Ukraine until March 2015.

    Under the agreement, Ukraine will pay the price of $378 per 1,000 cubic meters of gas up to the end of 2014 and $365 in the first quarter of 2015. These prices are calculated "on the basis of contractual price formula minus a $100 discount" and will be in place for the winter period, Gazprom CEO Alexei Miller said.

    From April onwards Ukraine will be charged the contract price of $485 per 1,000 cubic meters, though it may be trimmed if the parties agree on a new discount. The Gazprom chief added that after the discount expires at the end of the first quarter of 2015, the price will be largely determined by global oil price trends.

    Miller said Ukraine must pay $1.45 billion to cover part of its debt. Moscow expects Kiev to pay $760 million up front in November before Russia resumes gas deliveries, and an equal amount for supplies in December.

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    Russia-Ukraine Gas Conflict (292)

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    Tags:
    European Union, gas, European Commission, Petro Poroshenko, Jose Manuel Barroso, Ukraine
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