MOSCOW, March 12 (UPI) -- Ukraine will not be penalized for breaching its contractual obligations for gas purchases from Russia, Prime Minister Vladimir Putin said Thursday.
"Ukraine is currently not buying the volume of gas from us that it was contracted to do, and should pay a fine for this," Putin said. "We are waiving this fine, based on realities -- they can't pay. They are now on the verge of bankruptcy."
Ukrainian state energy company Naftogaz warned in February it may face difficulties with its gas debt to Russia as the regional economy falters under the global economic recession. State security officers last week raided the Kiev offices of Naftogaz, meanwhile, over allegations the company had taken illegal transfers of gas.
Putin said earlier the raids had "discredited" Ukraine as a transit country. Around 80 percent of the Russian natural gas bound for European markets travels through Ukraine.
Ukraine for February purchased only 35 billion of the 70 billion cubic feet stipulated in a Gazprom contract, RIA Novosti reports. Gazprom chief Alexei Miller had said earlier that his company would not fine Ukraine if it imported less natural gas from Russia than contracts stipulate, however.
A January dispute over gas debts and contracts prompted Russia to disrupt natural gas shipments to Ukraine. A contract reached to end that row puts severe penalties on Naftogaz regarding arrears.
