Gas dispute to 'cost Ukraine billions in Russian fines'

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The Independent Online

Ukrainian President Victor Yushchenko has warned that Russia could fine his country $10.4bn (£6.3bn) over a gas dispute.

Mr Yushchenko accused Russia of "political manipulations" ahead of meetings of the European Council on Thursday and Friday.

Russia, which supplies gas to Ukraine, has asked the EU to help its neighbour pay its energy bills. Ukraine has met every payment so far this year, but the Prime Minister, Yulia Tymoshenko, signed an agreement with Russia in January that contains heavy penalties for missing deadlines.

The President and Prime Minister are at odds over relations with Russia, with Ms Tymoshenko being closer to her Russian counterpart, Vladimir Putin. Mr Yushchenko has criticised Ms Tymoshenko over the terms of the deal.

Mr Yushchenko said that, under the January agreement, Ukraine could end up paying more than $10bn in the first quarter this year for not consuming enough gas as stipulated under the terms of the arrangement.

The call for an EU meeting was intended to smear Ukraine, he said, adding: "These political manipulations will last for years unless we revise the conditions. It's billions of potential penalties."

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