Russia Gives Ukraine More Time to Pay for Natural Gas and Lowers Its Asking Price

Russia’s state-controlled energy giant, Gazprom, on Monday pushed back by a week its ultimatum to Ukraine to pay in advance for natural gas or face a shutoff. It also lowered its asking price, signaling a softening of its stance in the two countries’ pipeline politics.

Gazprom’s decision followed an easing in tensions between Russia and Ukraine in diplomatic and military matters and was the clearest indication yet that Moscow’s economic pressure, at least in the short term, would let up now as well.

Ukraine has been highly dependent on Russian gas, giving the Kremlin powerful leverage over Kiev. But Gazprom is constrained in what it can do by falling spot gas prices on the European market and new pipeline policies in eastern Europe that are opening up alternative sources of gas for Ukraine.

Gazprom also offered a concession on price, with Mr. Miller telling reporters in Moscow that its asking price would be lowered to $385 per 1,000 cubic meters from $485, putting it on a par with price levels in Europe.

http://www.nytimes.com/2014/06/03/world/europe/russia-gives-ukraine-more-time-to-pay-for-natural-gas.html

Sounds like negotiations are getting serious. A 20% drop in Russia's asking price is significant and welcome, as is the delay even if it is only a week. Hopefully, things are trending in the right direction now.