Kiev's gas problems get political

KIEV, Ukraine, Nov. 9 (UPI) -- Ukraine could face a $7.8 billion penalty from Russian gas monopoly Gazprom for shortfalls in the consumption of natural gas, the Ukrainian president said.

A January row between Moscow and Kiev prompted Gazprom to cut gas supplies to Ukraine briefly. A contract settling the dispute places strict requirements on Ukrainian utility Naftogaz in terms of gas consumption and payment deadlines.

Ukrainian President Viktor Yushchenko told local television that his country could face significant fines for violating the terms of the agreement.

"For the current year, Ukraine has consumed gas worth $4 billion, half of which was paid through loans," he said. "Besides, it has been calculated that the (possible) amount of fines for Ukraine as of today is $7.8 billion."

Russian Prime Minister Vladimir Putin told Kiev in September that Ukraine would not be subjected to fines for less consumption. Yushchenko said that oral agreements should be obligated, RIA Novosti reports.

Yushchenko and Prime Minister Yulia Tymoshenko are competing in the first presidential election since the Orange Revolution brought both to power in 2004. Yushchenko is unlikely to win a second term and his comments on gas payments are seen by some as an attempt to undermine his rivals.

Ukrainian elections are scheduled for January.