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Naftogaz to Return Gazprom's 'Erroneous' $10 Million Payment

Ukraine's state-owned energy company Naftogaz said Thursday that the $10.5 million it received from Gazprom for gas transit in July was paid by mistake and will be returned.

Even though Naftogaz is heavily in debt to Gazprom for earlier supplies, the Russian company went ahead with the prepayment for its gas to be transported to Europe via Ukraine's pipeline network because it is a "reliable partner," Gazprom spokesman Sergei Kupriyanov was quoted as saying Thursday by ITAR-Tass.

Naftogaz later said the payment was "erroneous" and will be sent back as soon as the issue has been "sorted out."

According to Gazprom, as of Aug. 1 Naftogaz owed it more than $5 billion for gas supplies it did not pay for in late 2013, as well as between April and June 2014. Gazprom shut off all gas supplies to Ukraine on June 16, but continues to send fuel to Europe through Ukraine.

The tariff for gas transit is tied to the price Ukraine pays for supplies from Gazprom. Both sides have been in dispute over the price for gas since the beginning of the year. Naftogaz had tried to negotiate a price of $268.5 per 1,000 cubic meters, the amount Gazprom offered Ukraine last year after former Ukrainian President Viktor Yanukovych turned his back on an EU trade deal in favor of closer ties with Russia. Russia raised the price to $485.5 per 1,000 cubic meters after Yanukovych was toppled in February, but was prepared to go back down to the average price for European customers, about $370 per 1,000 cubic meters. Ukraine, however, refused to compromise.

See also:

Ukraine Says Ready to Compromise on Gas Price With Russia

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