Russia’s leading gas company turned up the pressure on Ukraine over back payments Wednesday, noting that more than $5 billion would soon be owed — raising the prospect that taps may soon be turned off at a time when the Kiev government struggles to contain civil unrest in the east.
If no payment is received by June 7, Ukraine will be in debt to the tune of $5.2 billion, the CEO of state-controlled Russian gas exporter Gazprom, Alexei Miller, said during a meeting in Germany.
Gazprom says Ukraine owes in excess of $3.5 billion, and has threatened to stop supplying the country with gas if it fails to make a pre-payment for June supplies by June 2. Miller told Russian President Vladimir Putin that Ukraine would consume a total of 3.5 billion cubic meters of Russian gas in May worth around $1.7 billion, increasing Kiev's gas bill.
Subsequently on Wednesday, Putin responded to the ongoing dispute over gas prices by saying he hoped to settle a dispute that threatens Russia’s lucrative gas supplies to Europe.
In televised remarks at a cabinet session in Moscow, Putin signaled that Russia could negotiate new terms for gas shipments to Ukraine if it pays off part of its debt.
At the heart of the dispute is the gas price being set by Russia. Kiev is seeking to change a 2009 contract that locked it into buying a set volume of gas, whether it needs it or not, at the highest price paid by any client in Europe.
Moscow dropped the price after Ukraine's then-President Viktor Yanukovych turned his back on a trade and association agreement with the European Union last year, but reinstated the original price after he was ousted in February.
The gas dispute comes amid ongoing unrest in Ukraine's east. Uneasy calm returned to the streets of Donetsk on Wednesday after the biggest battle so far against a pro-Russian separatist uprising — a conflict transformed by the landslide election of a pro-European leader who has vowed to crush the revolt.
Government forces killed dozens of rebel fighters on Monday and Tuesday in an assault to retake the airport, which the rebels had seized the morning after Ukrainians overwhelmingly elected Petro Poroshenko as president.
Pro-Moscow gunmen have declared the city of a million people capital of an independent Donetsk People's Republic.
After the government assault — the first time Kiev has unleashed its full military force against the fighters after weeks of restraint — morgues were filled with bodies of rebel gunmen. Some were missing limbs in a sign of the massive firepower used against them.
Poroshenko, a billionaire confectionary magnate who became the first Ukrainian since 1991 to win the presidency outright in a single round of voting, repeated his promise to restore government control rapidly over secessionist-held areas.
“We are in a state of war in the east. Crimea is occupied by Russia and there is great instability. We must react,” he told Germany's Bild newspaper. “The anti-terrorist operation has finally begun in earnest. We will no longer permit these terrorists to kidnap and shoot people, occupy buildings or suspend the law. We will put an end to these horrors – a real war is being waged against our country.”
In Donetsk, some shops were closed and streets were quieter than usual. Around 1,000 miners bussed in from around the eastern Donbas coalfield staged a demonstration in support of the separatists in Donetsk on Wednesday.
"Kiev does not rule us any more, we will no longer accept that," Denis Pushilin, leader of the separatist Donetsk People's Republic, which held a referendum on independence on May 11, told the miners.
Also in the east on Wednesday, Chechnya's Moscow-backed leader did little to dispel suspicions that he had sent in some of his famously ruthless troops to help the pro-Russia insurgents.
In a statement posted on his Instagram account, Chechen leader Ramzan Kadyrov said two-thirds of the 3 million Chechens live outside his province in Russia's North Caucasus mountains, so he can't "know where each of them goes."
"If someone saw a Chechen in the zone of conflict, he's there on his own," he said.
Fighters who looked like Caucasus natives have been seen among the pro-Russia rebels. Kadyrov's forces helped Russia win a quick victory in a 2008 war with neighboring Georgia. The 37-year-old leader has vowed unswerving fealty to Putin and has hailed his policy in Ukraine.
Al Jazeera and wire services