Russian natural gas prices to Ukraine will be reduced by $40 to $247 per thousand cubic meters, Russian Prime Minister Dmitry Medvedev said Monday.
“Considering Ukraine’s economic condition, a discount for gas sales to Ukraine was something expected from our side,” Medvedev said at a meeting in Moscow with Russian Energy Minister Alexander Novak and Alexey Miller, the head of Russian gas giant Gazprom.
Medvedev said that the discount would be effective on payments for the second quarter of 2015 and that Ukraine would have to pay the normal amount in the third quarter, which is $287 for 1000 cubic meters.
Gazprom had increased Ukraine's gas prices from $286 per 1000 cubic meters to $485 in April 2014, terminating its previous, and more favorable, agreement that had been made with the former pro-Russian government.
Calling Russia's decision a 'declaration of economic war,' Ukraine had sought to negotiate a new price given that European countries paid between $300 and $350 and refused to pay its debt or adhere to the price hike.
After long negotiations by the European Commission, Moscow, Kiev and the EU signed a deal in October to secure the flow of Russian natural gas to Ukraine last winter for $286 per 1000 cubic meters, with a deadline set for July 2015.
The three parties will meet on June 30 to discuss gas supplies.
Russia provides a third of Europe’s gas needs, half of it supplied via pipelines through Ukraine.
Reporting by Hakan Ceyhan Aydogan
Writing by Emre Gürkan Abay