You're reading: Financial Times: Moscow lures Ukraine with cheap gas

Moscow on Thursday tried to trump free trade talks between Ukraine and the European Union by offering its southern neighbour an $8 billion annual discount on natural gas prices if it instead joins Russia, Belarus and Kazakhstan in a free-trade and customs union. The geopolitical tug of war comes amid what EU officials have described as a “critical” round of negotiations with Kyiv over free-trade and associate membership agreements, which both sides hope to finalise this year. But a day before a weeklong round of negotiations between Kyiv and Brussels were expected to conclude, a deputy chief at Russia’s state controlled gas group Gazprom said his country would treat Ukraine as a domestic consumer, cutting its gas bills by $8bn per year, if it joined the Russia-led union. “We would use the principle of profit equalisation” in respect of Ukraine if it joined, said Valery Golubev, Gazprom’s deputy chief executive. Read the story here.