Russia Issues Gas Ultimatum to Ukraine

Russia threatened yesterday to cut gas supplies to Ukraine again in a move that appears to reflect its displeasure at the prospect of a new orange government in Kiev.

Gazprom, the state-controlled monopoly, said it would reduce supplies to Ukraine next month unless it settled a bill of more than £6.6bn.

The threat raised the specter of a renewed dispute between Russia and Ukraine that could affect supplies to western Europe. Russia cut off gas to Ukraine in early 2006.

Yesterday Gazprom said it had told its European clients about the dispute. It claimed that Ukraine had taken no action despite repeated requests for payment and said unless the debt was settled it would slash supplies.

But the timing of the announcement raised suspicions. It follows the apparent narrow victory of pro-western parties in Ukraine's general election. According to the latest results, Yulia Tymoshenko is likely to form a new coalition government with the party of Ukraine's pro-western president, Viktor Yushchenko.

Ms Tymoshenko infuriated the Kremlin on Sunday night by accepting a phone call of congratulation from Georgia's pro-western president, Mikheil Saakashvili.

Critics have accused the Kremlin of using energy supplies as a geopolitical weapon - and as a way of bullying its neighbors. The Kremlin insists prices are determined purely by market forces.

Yesterday's announcement triggered memories of a price dispute that saw gas supplies to the EU drop briefly in 2006 when Gazprom halted direct shipments to Ukraine.

The dispute took place when Ukraine was ruled by the orange coalition. Viktor Yanukovich, who enjoys friendly relations with the Kremlin, took over as prime minister last year.

In an interview with the Guardian last month, Mr Yanukovich said that Ukraine had stockpiled more than 26bn cubic meters of gas - thanks to its "clear, steady and predictable" relations with Moscow. He said nothing about unpaid bills.