Russia cancels zero export tax for gas to Ukraine

Moscow, April 3: Russia Thursday cancelled zero export tax for natural gas it supplies for Ukraine.

“I make a decision to cancel the government’s decree No.291 of April 30, 2010, taking into account that the Russia-Ukraine agreement has been also terminated,” Russian Prime Minister Dmitry Medvedev told Alexei Miller, CEO of the gas monopoly Gazprom, during a meeting.

In April 2010, Russia and Ukraine signed a document known as Kharkov Accord, which established zero export tax for Russian gas. In exchange, Ukraine consented to extend stay of the Russian Black Sea Fleet in Crimea for 25 more years, Xinhua reported.

According to Medvedev, the reason for the agreement’s cancellation was changing circumstances.

Russian President Vladimir Putin Wednesday signed a law terminating four treaties with Ukraine over the Black Sea fleet, including the Kharkov Accord.

Medvedev said that due to the Kharkov Accord, Russia had been losing profit it could otherwise receive as export levy.

Ukraine must find resources to pay for Russian gas in full and to pay off the debt it has accumulated, he said.

“The people currently making decisions in Ukraine must understand that,” Medvedev noted.

In the second quarter of 2014, Gazprom will start selling gas to Ukraine for $385.50 per 1,000 cubic metres, a sharp hike from $268.50 agreed to last December.