The Russia–Ukraine gas conflict started because of the Ukrainian company Naftohaz Ukrayiny, which produces oil and gas and Russian gas supplier company Gazprom over natural gas supplies, prices of gaz, and debts. It turns to be not just simple business disputes but it turns to be a very huge scandal between countries, its involved political leaders from several countries, because some of the European countries are dependent natural gas which imports from Russia and transported through Ukraine. As for today, Russia provides around 30% of the natural gas consumed in the European Union; approximately 80% of this gas goes through pipelines across Ukrainian soil prior to arriving in the European Union. 1Europeans countries purchasing gas from Russia, because its less expensive due to lower transportation costs. 2
The conflict started back in March 2005 because two companies couldn’t decide about the price of natural gas supplied and the cost of transit. During this conflict, Russia blaimed Ukraine that they were not paying for gas which Gazprom was delivering, but diverting that which was proposed to be exported to the EU from the pipelines. In the beggining Ukrainian government denied the accusation ,but then Naftohaz admitted that gas which was supposed to go to the EU countries was used for domestic needs. On 1 January 2006, Russia stopped to supply its gas which was passing through Ukrainian territory, but few days later countries made an agreement, and the supply was restored. But in October 2007 new conflict began over Ukrainian gas debts. This situation led to reduction of gas supplies in March 2008. After that during several years two companies had very hard relationships. On 8 June 2010, a Stockholm court of arbitration made an Ukranian company Naftohaz return 12.1 billion cubic meters of gas to RosUkrEnergo, which is a Swiss-based company (Gazprom controls 50% stake).
In April 2014 ‘Gazprom’ canceled Ukraine’s natural gas discount which was agreed at the end of 2013 Ukranian-Russian action plan because since 2013 their debt to ‘Gazprom’ was $1.7 billion. Later in December the price jumped up to $485 per 1,000 cubic meters because the Russian government canceled an export-duty exemption for Gazprom.