Ukraine reduces Russian gas imports by another 1/4th

The supply of Russian gas to Ukraine fell 23.2 percent in January and February compared to the same period last year, the Ukrainian Energy and Coal Industry Ministry has reported.

A source within the ministry also confirmed Russian oil giant Gazprom’s claim that Ukraine is using a reversal scheme to acquire Russian gas at a lower price.

Russian gas supplies to the Ukraine have effectively decreased by 75 percent since 2011: In the first two months of 2013, Kiev bought 4.74 billion cubic meters of gas from Russia; deliveries in January and February of 2012 totaled 6.17 billion cubic meters, and 12.4 billion cubic meters in 2011.

Also, the amount of Russian gas transported across Ukrainian territory during the same period fell by 24.3 percent to 13.4 billion cubic meters.

Ukrainian authorities say that high prices have forced them to look for ways to reduce the country’s dependence on Russian gas.

In February, Ukraine agreed to reverse gas supplies with Hungarian-German energy company RWE. Kiev is also reportedly eying similar deals with neighboring Poland, Slovakia and Romania. Though Ukraine’s reserve supplies are reportedly minimal at the moment, Kiev claims it will purchase up to 30 billion cubic meters of gas from Europe, fully satisfying the country’s demand for imported fuel.

On Saturday, Gazprom head Aleksey Miller alleged that Kiev’s purchases from Hungary are actually Russian gas, which is resold to Ukraine right after crossing the border. Miller called such a scheme “fraud,” which requires a “thorough investigation.”
 
On April 1, an unnamed source in the Ukrainian Energy and Coal Industry Ministry confirmed Gazprom’s allegations: "We do not see any law violation here. The gas goes abroad and then it’s being returned to Ukraine by its new owner,” he told Kommersant newspaper.   

The source stressed that the arrangement proves that Russian gas sold to Ukraine is overpriced, as the purchase of the same Gazprom fuel from Europe is “7 percent cheaper for [Ukrainian national energy company] Naftogaz” than direct imports from Russia.

Kiev pays $390 per 1,000 cubic meters of Russian gas purchased in Europe, while Russia sells Ukraine its gas at $406 per 1,000 cubic meters, as of the first quarter of 2013.

Ukraine currently owes Gazprom $7 billion in fines for failing to import an agreed-upon volume of natural gas in 2012; in February, Ukrainian President Viktor Yanukovych said that Kiev has no plans to pay the debt.