Ukraine is considering the possibility of importing energy from its European neighbours after Russia raised gas prices by 80 per cent in one week, turning the heat up on the country's fragile acting government.
Prime Minister Arseny Yatseniuk said Ukraine is holding emergency talks with its European partners in a bid to reverse Russia's recent price hike and condemned the move as "unacceptable" and politically motivated.
"There is no reason why Russia would raise the gas price for Ukraine ... other than one: politics," Mr Yatseniuk told Reuters. "We expect Russia to go further in terms of pressure on the gas front, including limiting gas supplies to Ukraine."
The talks come after Gazprom, Russia's state-controlled energy giant, announced it would increase the price of gas to $485 per 1,000 cubic metres for Ukraine, almost doubling its fees in three days, as a result of a new export duty. Gazprom also warned Ukraine owes Russia $2.2bn in unpaid bills.
The Kremlin had previously offered Ukraine a huge discount on gas prices, but the deal was overturned following the ousting of president Viktor Yanukovych in February after months of protests.
The White House said gas prices should be determined by the market and described Gazprom's actions as "taken coercively against" Ukraine.
Last month, Ukraine's acting government agreed to increase gas prices by 50 per cent in an effort to secure an $18 bn rescue package from the International Monetary Fund or risk defaulting on its debt obligations.
In a statement, the IMF warned the country is facing "difficult" challenges following the "intense economic and political turbulence of recent months".Reuse content