Russia hikes Ukraine’s gas bill as new Kiev gov't tries to reign in far-right nationalists

People pass by barricades near the Dnipro Hotel in center Kiev, Ukraine, April 1, 2014. AP

MOSCOW -- Russia on Tuesday sharply hiked the price for natural gas to Ukraine, raising the heat on its cash-strapped government, while Ukrainian police moved to disarm members of a radical nationalist group after a shooting spree in the capital.

Alexei Miller, the head of Russia's state-controlled Gazprom natural gas giant, said Tuesday that the company has withdrawn December's discount that put the price of gas at $268.50 per 1,000 cubic meters and set the price at $385.50 per 1,000 cubic meters for the second quarter.

The discount was part of a financial lifeline Russia's President Vladimir Putin offered to Ukraine's President Viktor Yanukovych after his decision to ditch a pact with the European Union in favor of closer ties with Moscow. The move fueled three months of protests which forced Yanukovych to flee to Russia in February.

Radical nationalist groups played a key role in Yanukovych's ouster, but they quickly fell out with the new government. Last week, one of the leaders of the most prominent radical group, the Right Sector, was shot dead while resisting police.

Right Sector members then besieged parliament for several hours, breaking windows and demanding the resignation of Ukraine's Interior Minister Arsen Avakov. They lifted the blockade after lawmakers set up a panel to investigate the killing.

Late Monday, a Right Sector member shot and wounded three people outside a restaurant adjacent to Kiev's main Independence Square, including a deputy city mayor, triggering a standoff that lasted overnight.

Police surrounded the downtown Dnipro Hotel, which Right Sector had commandeered as its headquarters, demanding that the radicals lay down their weapons and leave. Avakov said that Right Sector members got into buses Tuesday morning leaving their weapons behind and headed to a suburban camp under the escort of officers of Ukraine's Security Service.

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Ukraine Map
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Russia has pointed at Right Sector's actions to push its claim that the new Ukrainian government was kowtowing to nationalist radicals, who threaten Russian-speakers in southeastern Ukraine. Russia has pointed at the perceived threat from ultranationalists to defend its annexation of Crimea, and has concentrated tens of thousands of troops along its border with Ukraine, drawing Western fears of an invasion.

Putin and other officials have said that Russia has no intention of invading Ukraine. Defense Minister Sergei Shoigu insisted Tuesday that the Kremlin wants a "political settlement that would take into account interests and rights of the entire Ukrainian people" and had no intention to threaten Ukraine's statehood.

At the same time, Russia has used financial levers to hit Ukraine that is teetering on the verge of bankruptcy. Gazprom's Miller said that the decision to charge a higher price in the second quarter was made because Ukraine has failed to pay off its debt for past supplies, which now stands at $1.7 billion.

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