Russia halts gas supply to Ukraine

Russia has cut off gas supplies to Ukraine as the countries failed to reach a compromise deal over unpaid bills and gas prices.

The move comes at a time of strained relations between the countries, following Russia’s annexation of Crimea in March.

Russian oil company Gazprom wanted a payment of $1.95bn (£1.15bn) for past due bills. It is suing Ukraine state energy company Naftogaz in an international court for $4.5bn.

Gazprom spokesman Sergei Kupriyanov told The Associated Press that since Ukraine had paid nothing for the gas by Monday, Moscow has no legal grounds to supply Ukraine with any more.

"Gazprom supplies to Ukraine only the amount that has been paid for, and the amount that has been paid for is zero," Kupriyanov said.

Naftogaz said that it has filed a case against Gazprom looking for a "fair and market-based price" for gas. It also wants repayments of $6bn in overpayments for gas from 2010.

The European Commission said in a statement that Ukraine was willing to pay $1bn now and more later, but Russia didn’t accept the deal.

If unresolved, the issue is expected to hinder the long-term energy supply to Europe supplied through the Ukraine pipeline.