Russia extends natural gas deal with Ukraine

Russian president Vladimir Putin has approved a plan to extend Moscow’s current natural gas deal with Ukraine for another three months. Russian authorities announced the extension Tuesday, just hours before a temporary pricing agreement reached in October 2014 was set to expire.

The deal required Ukraine to make monthly payments in advance of delivery, with Kyiv paying $365 per 1000 cubic meters in the first quarter of 2015. Russian energy officials recently said Ukraine would pay $348 beginning April 1.

In a separate development, a top Russian economist said Russia’s 2014 annexation of Ukraine’s Crimean Peninsula would cost up to $200 billion in the next four years as the Russian economy teeters on the brink of recession.

Alexey Kudrin, Russia’s finance minister from 2000 to 2011 and a former deputy prime minister, issued his prediction Tuesday at a forum marking the 15th anniversary of Putin’s rise to power.

In his televised comments, Kudrin warned that Russia – already facing plummeting global oil prices and stiff Western economic sanctions for supporting Ukraine’s pro-Russian rebellion – is not likely to return to economic prosperity in the near future.

Moscow’s RBC news agency said that Kudrin predicted five years of economic stagnation and that he described the economic crisis as the most serious challenge facing Putin’s widespread popularity. The Russian economy is expected to contract by three to six per cent this year, its steepest decline since Putin was first elected president in 2000.


(Photo: Jayesh Nair)