Russia Orders Ukraine to Prepay for Natural Gas

Russia has ordered energy-dependent Ukraine to pay in advance for all future natural gas deliveries, as Kyiv's cash-poor government struggles to maintain economic and political stability.

The Russian Energy Ministry says Ukraine missed a Wednesday deadline to pay down its $3.5 billion energy debt, and said all gas sent from June 1 will require cash in advance.

It remained unclear late Thursday what impact the pre-payment edict will have on the European Union. Russia supplies about 30 percent of Western Europe's gas needs, with about half of those supplies passing through Ukraine.

In another development, pro-Russian separatists in the eastern Ukrainian regions of Donetsk and Luhansk said they will go ahead with a referendum Sunday on whether to declare independence from Kyiv, despite calls from Russian President Vladimir Putin to postpone the vote.

Russian media quoted separatist Denis Pushilin, leader of the self-declared Donetsk People's Republic, as saying the referendum will ask residents to vote yes or no on whether they support a "proclamation of state independence."

Luhansk residents will be asked the same question, despite recent polling showing 70 percent of the residents in eastern Ukraine want to remain part of the country.

In Washington, the U.S. State Department issued a new travel warning for Ukraine, advising Americans to defer all non-essential travel to the country. It also warned U.S. citizens to avoid Odessa, eastern regions gripped by weeks of separatist protests, and the Crimean peninsula, which was annexed by Moscow in March. 

The United States and Ukraine do not recognize the annexation.

Ukraine has so far refused to pay down its energy debt, to protest Moscow's recent gas price increase that nearly doubles what Ukraine's energy monopoly Naftogaz pays its neighbor.

Russia cut off gas supplies to its neighbor twice in the past decade, and each time Moscow accused Kyiv of siphoning off supplies meant for Western Europe. 

The 2006 and 2009 cutoffs led to major energy disruptions in EU countries before payment agreements between Moscow and Kyiv were reached and gas flow restored.

The Russian president last month warned the European Union that it would require gas prepayments from Ukraine, unless Europe helped cover the Ukraine debt. Since then, the International Monetary Fund has approved a loan package to Kyiv that includes an initial payment of more than $2 billion.

VOA News / May 10, 2014 09:00 KST