Russia Demands Ukraine Pay Gazprom Up Front as Gas War Escalates

Russia has demanded Ukraine pay for gas in advance from June, according to the country's energy minister, after Kiev failed to pay for gas deliveries in April.

Russian energy giant Gazprom said on Wednesday that Ukraine now owed the company a total of $3.51bn, after failing to pay for April's gas supply.

"According to contract... failure of obligations automatically leads to a switch to prepayment for gas deliveries for Ukraine starting from 1 June," Russian Energy Minister Alexander Novak said in a statement late Thursday.

Russia had already threatened to cut supplies to Ukraine if Kiev does not pay up front for gas before the end of May.

The European Union relies on Russia for around a third of its gas needs, while 40% of that is delivered via pipelines through Ukraine.

The gas dispute between Russia and Ukraine escalated after Ukraine's pro-Russian president Viktor Yanukovych was ousted from office and replaced by an interim government seeking closer ties with Europe rather than Russia.

Russia almost doubled the price it charges Ukraine for gas last month, a price that Kiev rejected as a "political price" and an economic assault.

In previous disputes over energy prices, Russia has twice cut supplies to Ukraine in January 2006 and 2009. Those cuts affected supplies to some European countries, although the crises were resolved within a matter of days on both occasions.

Novak added that Gazprom would send a preliminary bill for June before 16 May and would then ship gas payments in volumes that reflect payments received before 31 May.

"Russia can't and should no longer carry the burden of support of Ukraine's economy alone, giving it discounts on the gas price and forgiving debts, in fact covering the deficit in Ukraine's trade," Novak said in a statement.

Ukraine recently received $3.2bn from the International Monetary Fund. The payment was the first tranche of an aid package worth up to $17bn over two years.