Ukraine Must Pay Cash For Gas , Says Russia's Putin

In an open letter to European leaders , Mr. Putin said Ukraine now owed Russia $ 3.5 bn ( 2.55 Euros ) ( L 2.1 bn ) for gas already delivered he said Russia remained open to consultations , but the E.U. had failed to come up with specific solutions

Mr. Putin's letter follows simlar comments by Gazprom , Boss Alexei Miller , Mr. Miller said on Monday that the state energy giant could halt natural gas shipments to Ukraine on June 3rd unless the country pays in advance for supplies

"Given the circumstances , the Russian company has issued an advance invoice for gas deliveries to Ukraine , which is completely in accordance with the contract , and after June 1st gas deliveries will be limited to the amount prepaid by the Ukrainian company" Mr. Putin said in his letter , which was released by the Kremlin on Thursday

Ukraine has refused to cover it's obligations in protest over Moscow's decision to nearly double the price it charges Kiev for gas imports

Ukraine's finance minister Oleksandr Shlapak , said on Monday that his country was willing to cover it's outstanding payment as soon as Russia lowered it's price , he added Ukraine was prepared to issue bonds worth $ 2.16 bn to address it's gas arrears

"If Russia extends the old price of $ 268 per 1,000 cubic meters until the end of the year , we will immediately cover the debt" the UNIAN news agency quoted Mr. Shlapak as saying

Gasprom now charges Ukraine $ 485.50 per 1,000 cubic meters , the highest rate of any of it's European clients , close to 15% of all gas consumed in Europe is delivered from Russia through Ukraine

There is a danger for E.U. nations that Ukraine will start taking gas Russia had earmarked for it's European clients , something it did when it was cut off from russian gas during previous disputes in 2006 and 2009