Ukraine crisis will worsen if Russia stops gas supplies

The Ukrainian crisis that has economic roots will become worse if Russia stops supplying highly subsidised gas to that country, a Mumbai-based think tank said Wednesday.

"Equally important is the issue of what happens to the Ukrainian economy, which is in dire need of financial support and will become worse if Russia stops supplying highly subsidised gas to Ukraine," Gateway House said in a statement, presenting an outlook for Ukraine.

Pointing out that the crisis raises other issues on the supply of Russian gas through pipelines passing through Ukraine to western Europe, the report said: "It is still moot whether the large availability of shale gas from the US can quickly make up the deficit if Russian gas no longer flows into west European countries."

A crisis, which unfolded in November 2013 following ousted Ukrainian President Viktor Yanukovych's decision not to sign an agreement with the European Union because the choice of a $15 billion credit offered by Russia appeared more practical, could also hold up many issues that Russia and the international community were working on, the statement added.

The issues that Russia was working on with other members of the UN Security Council include meetings over the Iranian nuclear programme and on ending the war in Syria.

Meanwhile, Russian President Vladimir Putin warned Tuesday that if Ukraine does not pay the country's gas debt, currently ranging at $1.5-1.6 billion, its February debt could touch $2 billion.

Saying the Russian company Gazprom's cancellation of gas price discounts to Ukraine was a purely commercial decision, Putin told the media that after Gazprom had granted the gas price discount, the Russian government paid for the first tranche of Ukrainian bonds but Ukraine had neither started to repay the debt, nor make current gas payments, reported Itar-Tass.