Russia’s Energy Minister Alexander Novak announced that Russia cancels a discount on gas for Ukraine from April 1 as the “winter agreement” on gas supplies for Ukraine expired. Russia insisted on quarterly gas prices for a winter period. From now on, Ukraine will have to pay for gas supplies in full. "On March 31, 2016 the gas discount for Ukraine expires. The discount was provided by the Russian government for the first quarter of 2016 at $17.77. The final price of gas for Ukraine in the first quarter was $212 per 1,000 cubic meters. The agreement about the discount was achieved within the framework of the so-called winter package agreed between Russia, Ukraine and the European Union. Starting from 1 April of this year, the gas price for Ukraine will fully comply with the current contract between Gazprom and Ukraine’s Naftogaz," the minister said.
Regular tripartite consultations between Russia, the EU, and Ukraine on gas supplies to Ukraine started in May 2014. The parties agreed a discount of $24.6 per 1,000 m3 for Q4 2015 whereas a contract price was set at $252 per 1,000 m3. It means Kiev paid $227.4 per 1,000 m3. The Kremlin brought forward a new proposal for Q1 2016. The discount was revised to $17.77 per 1,000 m3 thus bringing the price down to $212.23. The contract price was $230 per 1,000 m3. Importantly, Ukraine still claims that Russia sells its gas at inflated prices.
