Ukraine says it won't pay "political price" of Russian gas

|By:, SA News Editor

Ukraine's prime minister says his country won't pay the high "political price" Russia is demanding to keep natural gas flowing in, and refuses to make a down payment on its gas debts until a new price is negotiated.

Gazprom (OGZPY) has demanded that Ukraine settle $3.5B it owes for gas deliveries; if it does not do so by June 2, Russia has said it will demand prepayment for supplying any more gas to Ukraine.

EU energy chief Günther Oettinger has acted as a mediator between the two sides, setting up several meetings this month to break the deadlock, but he is beginning to show some exasperation with Ukraine's failure to pay part of its bill for gas that already has been delivered.