KIEV, Ukraine -- Russia’s Gazprom announced on Tuesday that it would grant Naftogaz, the cash-strapped Ukrainian state energy company, a few extra days in January to pay its December natural gas import bill due to the New Year and Christmas holidays.
“Taking into account the holidays, an agreement was reached to postpone the payment date for December supplies from January 7 to January 11 2010,” Gazprom said in a statement. January 7 is the day most Christians in both countries celebrate Christmas.The European Union, which saw Russian gas supplies cut off for weeks during the Russia-Ukraine energy spat in January 2009, has urged both sides to avoid repeat disruption. In recent months, Russian and Ukrainian officials have moved to reassure Brussels that a repeat stand-off was unlikely.But with the political temperature in Ukraine high ahead of a presidential election, some experts fear political rivalries in Kiev could help spark a repeat dispute. Moreover, the cost of Russian imports for a financially stretched Ukrainian government is to increase sharply during the first quarter of 2010 from a 2009 average of $208 per 1,000 cubic meters to about $305.As Ukraine is hit by a 15 per cent drop in gross domestic product, Naftogaz has struggled amid falling gas consumption and payment by consumers.Kiev has stayed financially afloat and made monthly payments to Gazprom this year largely thanks to $11bn in aid provided by the International Monetary Fund.But a lack of political consensus and reforms in the run up to a January 17 presidential election caused the IMF to freeze additional assistance, raising fears that Kiev could find it particularly difficult to pay gas import bills in coming months.Ukrainian officials have in recent weeks held talks with the IMF on resuming assistance in the form of an emergency $2bn loan. They say the assistance is needed to ensure timely gas, pension and wage payments ahead of the election – expected to wrap up after a February second round run-off.