Energy Held Hostage: Russian Energy Supplier Gazprom Price Gouges their Ukrainian Clients

Screenshot 2014-04-02 at 6.50.16 AMEnergy supplies must not be used as a political weapon, U.S. Secretary of State John Kerry said Wednesday at an EU-U.S. energy summit dominated by the simmering crisis in Ukraine.

His remarks in Brussels, Belgium, came 24 hours after Russian energy giant Gazprom announced a hefty increase in the price of natural gas it supplies to Ukraine.

Kerry, who spoke flanked by EU foreign policy chief Catherine Ashton, said the European Union and United States were taking “important steps” to make it harder for one state to hold another hostage to energy supplies.

“No nation should use energy to stymie a people’s aspirations,” said Kerry, co-chairman of the EU-U.S. Energy Council. “We cannot allow it to be used as a political weapon or an instrument of aggression.”

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Europe and the United States are working together to reduce Ukraine’s reliance on Russian energy by developing alternative sources for natural gas, he said.

“We’re working in lockstep to help Ukraine bring natural gas in from Poland and Hungary and develop a route through Slovakia,” he said, adding that the United States also hopes to export more natural gas in the future.

At the same time, Kerry said, Ukraine has committed to work on reducing consumer subsidies to make its energy market more efficient.

The International Monetary Fund last week agreed to lend Ukraine up to $18 billion over the next two years in return for a package of reforms, including to its energy market.

In the United States, the House of Representatives gave final congressional approval Tuesday to legislation that would provide $1 billion in loan guarantees to Ukraine, as well as imposing sanctions on Russia over its actions in Ukraine. President Barack Obama is expected to sign the bill.

“Developments in Ukraine have brought energy security concerns to the fore and prove the need to reinforce energy security in Europe,” said a joint statement issued by the EU-U.S. Energy Council.

The statement also “underscored that energy relations with Russia must be based on reciprocity, transparency, fairness, non-discrimination, openness to competition and continued cooperation to ensure a level playing field for the safe and secure supply of energy.”

After the meeting, Kerry joined NATO foreign ministers for a second day of discussions focused on the crisis sparked by Russia’s annexation of Ukraine’s Crimea region.

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