Ukraine's government said it had offered to pay a $1.34 billion debt for Russian gas supplies with currency and goods over a 10-year period
s with currency and goods over a 10-year period – a day after it had backtracked on a bonds-for-debt deal.
Energy-poor Ukraine has relied on Russia for most of its natural gas supplies over the last decade and built up huge debts, prompting long-running debt negotiations and accusations from Russia that its neighbor steals gas.
“We sent (Russia) a very realistic proposal … the restructuring of these debts,” Prime Minister Anatoly Kinakh told reporters. “We suggested 10 years, with 50 percent to be paid in currency and 50 percent in goods.”
There was no immediate reaction from the Russian government, but Kinakh’s proposal came just a day after he tore up a deal struck by the previous reformist government.
Under that agreement, hammered out by former Prime Minister Viktor Yushchenko who was ousted in a parliamentary no confidence vote in April, Ukraine would have securitized a $1.342 billion gas debt by issuing government bonds.
Kinakh has taken a harder line on paying off the debts and said on July 3 he considered the debt a corporate one rather than a state one. Ukraine’s natural gas importer, Naftogaz Ukraina, is a wholly state-owned company.
He said on July 4 Naftogaz would be responsible for paying the debts.
Naftogaz has in the past said the debts resulted from non-payment by its own domestic customers, and it could not pay Russia until its cash collection rate improved.
The total level of Ukraine’s debts to Russia is disputed. Both countries agreed them to be around $1.4 billion in February but they have since been estimated closer to two to three billion dollars.
Ukraine, which imports more than 80 percent of its gas, consumes 75 billion cubic meters a year – much of which is wasted due to a leaky infrastructure and inefficient usage.
