Russia grants Kiev gas discount, but Kiev counts on the EU to fit the bill.

Russia grants Kiev gas discount, but Kiev counts on the EU to fit the bill. (RBTH).

The centrist newspaper Nezavisimaya Gazeta writes that Russian Prime Minister Dmitry Medvedev has signed a decree on the extension of discounted gas supplies to Ukraine. Moscow is ready to supply Kiev with gas at $250 per 1,000 cubic meters. The publication explains that this will allow Ukraine to acquire gas at a cheaper rate than directly from gas hubs in Europe.

However, Kiev, writes the newspaper, is not able to purchase reserve gas even at reduced prices.

The Ukrainian government is counting on the Europeans paying for its gas supplies: Kieve is holding talks with the European bank for Reconstruction and Development, the World Bank and other international financial institutions on the granting of loans for pumping natural gas into storage tanks in the summer period in order to create the necessary fuel reserves for the next heating season and ensure the uninterrupted transit of Russian gas to the EU.

Nezavisimaya Gazeta notes that Kiev’s current attempts to use European money to replenish Ukraine’s underground gas storage tanks are a repeat of the actions taken by former Prime Minister Yulia Tymoshenko in 2009.

Russian experts explain that the super-reduced prices for Ukraine are principally due to political factors. “It appears that the European Union is now interested in the preservation of gas supplies from Russia to Ukraine. And the Europeans may allocate further credit to Ukraine for this,” says Mikhail Krutikhin, a partner at consulting company RusEnergy.

However, he stressed that the sides remained in fundamental disagreement on the issue of the gas contract.  Hmmm.........And there's still the unsettled remaining debt to Russia. Read the full story here.