MOSCOW, May 15 (RIA Novosti) – Russian Energy Minister Alexander Novak has floated the idea of creating a global energy market regulator that would keep its finger on the pulse of energy networks and compel participants to deliver on their contractual obligations.
“There is an urgent need for an adequate international institutional structure that would regulate international cooperation and form a set of tools for shaping the energy market,” Novak said Thursday at the 14th International Energy Forum.
The Russian minister suggested the regulator could keep an eye on the energy market and warn the global community about negative trends in order to shore up energy security risks.
Novak stressed that the security of energy deliveries hinged on importers’ commitment to pay for them promptly. “Unfortunately, the recent months have shown that sometimes there’s no follow through, which increases [energy] risks and threatens security and reliability of [energy] supplies,” the minister said.
The proposal came as Ukraine’s state-run Naftogaz has defaulted on its gas debt to Russia, despite Kiev’s announcement that it is ready to cover the debt at a reduced price.
Russia has switched to an advance payment system in its gas supplies for crisis-hit Ukraine because the $3.5 billion in unpaid bills. If Ukraine fails to prepay for its June gas bill, Russia may halt gas deliveries to the country on June 3.
Russian energy giant Gazprom also fears that Ukrainian state-run gas company Naftogaz could fail to fulfill its commitments on gas transit, siphoning off gas destined for European consumers.