Ukraine today urged schools to close and factories to cut production after Russia refused to restart natural gas deliveries, while residents shivered as the country strained to save on gas supplies. Russian gas deliveries to Ukraine were supposed to restart on Thursday following a foreign court ruling aimed at ending years of disputes between Kiev and Moscow, including two halts to Russian gas supplies to Europe through Ukraine. But Russia's Gazprom gas giant unexpectedly refused to resume deliveries, returning the prepayment for supplies made by Kiev, claiming amendments to a contract had not been completed. The decision coincided with freezing temperatures all over Ukraine, and the government called on Friday for measures to reduce consumption. "Starting today, we recommended ... to stop the work of kindergartens, schools and universities," energy minister Igor Nasalyk told lawmakers. And he urged Ukrainian companies to adjust their operations to save gas, while power companies were ordered to switch to fuel oil where possible. Nasalyk said these savings measures would be in effect until Tuesday, when temperatures are expected to rise. Gazprom director Alexei Miller said Friday that the company would immediately turn to the Stockholm arbitration court to break its contract with the Ukrainian operator Naftogaz, Russian news agencies reported. A ruling by the same court last year was meant to halt disputes over gas prices and shipments, which had often been a proxy for political disputes between Moscow and Kiev. The court set a price and ordered Kiev to resume purchases it had cancelled after Russia annexed the Crimea from Ukraine. Naftogaz said Friday that Gazprom had not only refused to resume deliveries meant for it, but lowered the pressure in gas pipelines by 20 percent and minimised sales to other customers. Gazprom was trying to portray Ukraine in a negative light and suggest that it was willing either to let its own population freeze or make it out to be "an unreliable transit company that takes the gas away" from European countries, Naftogaz said in a statement. Naftogaz later said it had signed a contract with Poland's PGNiG for urgent gas supplies to the end of the month. Gazprom is a major gas supplier to Europe, but still relies to a certain extent on pipelines that transit through Ukraine.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
RECOMMENDED FOR YOU