Ukraine pays Russia for gas after Putin warning

(MARIUPOL) - Ukraine has paid Russia for October gas supplies, Prime Minister Yulia Tymoshenko said on Friday, after her Russian counterpart Vladimir Putin had warned against late payment.

"Today we've paid Russia the next 500 million dollars (336 million euros)," Tymoshenko said during a visit to the eastern Ukrainian city of Mariupol.

Late last week, Putin said Ukraine appeared to be struggling to pay for its Russian gas supplies again and accused President Viktor Yushchenko of seeking to provoke a new gas crisis.

A spokeswoman for the Russian gas giant Gazprom declined to comment.

Valentyn Zemlyansky, a spokesman for Ukraine's Naftogaz, said that in October Ukraine bought 2.3 billion cubic meters of gas at a price of 208.12 dollars per 1,000 cubic metres. He declined further comment.

The deadline to pay Ukraine's October gas bill was Monday.

Tymoshenko said that the government had paid for the gas despite a "complete blockade on the part of the Ukrainian National Bank, (and) a complete blockade on the part of the president."

She said: "Today we are selling gas at below its market price and buying it at a market price."

She also observed: "Has anyone asked how we are coughing up money for Russia? How we are settling accounts, what it cost us? I don't even want to talk about it now."

Last week, Putin warned of possible interruptions to gas supplies to Europe, saying that Ukraine could again have problems paying for Russian gas.

He spoke after a telephone conversation with Tymoshenko, who complained that Yushchenko was preventing the transfer of funds to Russia.

Putin's comments prompted fears over energy in Europe, where politicians called for the Russian premier to stop gas scaremongering.

Russian gas supplies were cut off to a dozen European countries for two weeks in January as part of a bitter dispute over payments and prices between Russia and Ukraine.

The president of the EU Commission Jose Manuel Barroso expressed hope in a phone conversation with Yushchenko late on Thursday that the payment would be made on time, a spokesperson for the European Commission said on Friday.

"We are following the situation with concern," the spokesperson said.

Haggling over gas supplies and prices at the beginning of winter has become a regular occurrence in recent years.

The latest row comes just months before Ukraine is set to elect a new president in polls in which both Tymoshenko and Yushchenko will run against the more pro-Russian Viktor Yanukovich.