Ukraine pays off December gas bill

(KIEV) - Ukraine has paid off its December gas bill, the national energy company Naftogaz told AFP Wednesday, following concerns that it faced serious difficulties meeting a January 11 deadline.

"The company has settled the December bill for imported gas in full and in time," company spokesman Valentin Zemlyanski announced.

A source close to Naftogaz said the company drew on reserves from Ukraine's central bank to pay the bill of about 900 million dollars (625 million euros).

Earlier in the day Ukrainian President Viktor Yushchenko had asked the central bank to step in to help pay for the deliveries of Russian gas, citing Naftogaz's difficulties to pay off the bill.

"Faced with this situation, I have to (...) ask you to find a solution to the problem by buying back government treasury bonds", Yushchenko wrote in a letter to the president of the central bank.

In the same letter the Ukrainian president repeated his strong criticisms of Prime Minister Yulia Tymoshenko, his rival in the presidential election on January 17, blaming her for Naftogaz's financial problems.

On December 25 the head of Russian gas giant Gazprom said Ukraine had "very serious difficulties" paying for its deliveries, which Tymoshenko denied.

Five days later the International Monetary Fund said it had eased loan criteria for Ukraine to allow the government to use international reserves to meet its debts, including gas payments.

Relations between Russia and Ukraine over gas are followed closely by Europe.

Last year a dispute between the two former Soviet republics on natural gas prices led to a cutoff of Russian gas supplies to western Europe and severe shortages in some countries amidst freezing winter weather.

A quarter of the gas consumed in the European Union comes from Russia, 80 percent of which passes through Ukraine.