By Laura Barron-Lopez - 04/02/14 10:10 AM EDT
Ukraine is feeling Russia's grip tighten as its state-controlled energy company upped the economic pressure by dramatically raising the price of its natural gas.
Gazprom upped the price to $385 for 1,000 cubic meters of gas from $268, an increase of roughly 44 percent, Al Jazeera reports.
Chief executive of Gazprom Alexey Miller said in a statement on Tuesday that the price increase was agreed upon in December.
The discount previously offered to Ukraine by Russian President Vladimir Putin was a financial lifeline extended after Ukraine went back on a pact with the European Union in exchange for closer ties to Moscow. That discount came under review each quarter.
"The discount will no longer apply," Miller said in a statement. "This is due to the inability of the Ukrainian side to pay for debts from 2013 and realise full payments for current deliveries."
The spike comes as U.S. and Russian diplomats are headed toward a settlement that would stop additional Russian military intervention in Ukraine.