Russia will suspend gas supplies to Ukraine on Thursday morning, Russia's state gas monopoly Gazprom Chief Executive Alexei Miller said on Wednesday.
Talks on natural gas exports from Russia to Ukraine in 2009 " ended fruitlessly" and Gazprom will completely cut off gas supplies to Ukraine at 10:00 Moscow time (0700 GMT) on Jan. 1, Miller said.
"The Ukrainian side will bear all responsibility for the situation," he was quoted by Interfax news agency as saying. However, Miller said Gazprom will do its best to make sure European consumers receive their gas on time.
Gazprom says Ukraine owes over 2 billion U.S. dollars for gas it imported. While Ukraine said it had transferred 1.5 billion dollars to an account to cover its debt, Miller said Gazprom has never seen on its accounts the money Ukraine paid.
Gazprom had insisted that Ukraine pay 418 U.S. dollars per 1, 000 cubic meters of gas next year, more than double what it paid in 2008. The Russian energy giant on Wednesday offered to charge Ukraine a reduced price of 250 dollars, which Ukrainian officials said was still too high.
Earlier in the evening, Russian Prime Minister Vladimir Putin said at a televised meeting with President Dmitry Medvedev that " the consequences could be dire for Ukraine if it annuls its gas transit contract with Gazprom."
Ukraine sits on the main transit route for Russian gas exports to Europe, accounting for the transmission of a quarter of the continent's gas supply.
In 2006, a dispute over gas prices between Kiev and Moscow sent jitters among European customers after Gazprom cut all gas supplies to Ukraine.
(Xinhua News Agency January 1, 2009)