. Last Updated: 07/27/2016

Pipe Stirs Ukraine,Russia Ire

KIEV -- Ukraine and Russia blamed each other Wednesday for the halting of Russian crude supplies through the Druzhba pipeline to Western Europe.


Ukrainian oil officials said Moscow was preventing Russian crude from passing through the pipeline.


"Our pipeline is not working because the Russian Fuel and Energy Ministry is not permitting Russian oil producers to send through their oil," Lubomyr Bunyak, general director of the Ukrainian section of the pipeline, said.


The Russian Fuel and Energy Ministry declined to comment. But Oleg Pilipets, a senior adviser to the president of Transneft, Russia's state crude transport monopoly, said a unilateral tariff hike by Ukraine on Monday had violated the terms of contracts between Russian producers and consumers in the Czech Republic and Slovakia.


"If there is an agreement to supply, then we supply, both in Russia and beyond. If not, then we don't," he said. "Our producers were counting on other tariffs, the tariffs they had agreed to when they signed deals to deliver to the Czech Republic and Slovakia."


Bunyak said Ukraine had increased transport tariffs slightly. But he declined to give details, saying they were a "commercial secret." Interfax said Ukraine wanted Moscow to agree to a 10 percent tariff rise.


Alexander Svirdlov, a senior official at Ukraine's State Oil and Gas Committee, said Kiev was keen to negotiate with Moscow on higher transit tariffs for Russian oil heading westward.


"Ukraine is losing money because its transit tariffs do not compensate for the higher prices of electricity and Russian gas, both of which we need to run the pipeline," he said.


Czech industry officials said Tuesday that Russia had cut crude supplies to the Czech Republic and Slovakia as administrative delays in Moscow hampered the conclusion of new purchase agreements and export licenses.


Svirdlov confirmed the pipeline was not pumping oil, but he expected supplies to be renewed in one or two days.