Russia will limit or suspend gas supplies to Ukraine in case Ukraine’s energy company Naftigaz Ukrainy makes no advance payment for April gas imports till the end of March.

Under the gas contract between Russia’s Gazprom and Naftogaz of January 19, 2009, the seller may partially or completely suspend the fulfillment of its liabilities in case the buyer does not fulfill its obligations.

In line with the contract, Gazprom is to issue a bill to Naftogaz by March 16 and the latter is to pay it by the end of March. If the bill is not paid, gas supplies may be limited.

On Friday, Gazprom CEO Alexei Miller told journalists that his company had received no payments from Naftogaz Ukrainy for February’s Russian gas supplies.

“Today, on February 7, was the deadline for payments for February’s gas deliveries to Ukraine,” he said. “Gazprom has received no debt payments. With a discount in the first quarter, Ukraine’s overdue debt for gas has significantly increased, reaching 1.860 billion dollars.”

“This actually means that Ukraine has stopped paying for Russian gas. This contradicts completely provisions of the contract and international trade practice,” Miller said. “We have always fulfilled and we will fulfil our contractual obligations.”

“But we cannot supply gas for free. Either Ukraine clears the debt and pays for current deliveries, or there is a risk to return to the situation in early 2009,” he said, referring to the gas dispute between Russia and Ukraine, when Gazprom temporarily halted deliveries to Naftogaz.

“We will keep the Russian government informed of the current situation,” he added.