Moldova will pay January gas advance to Gazprom on time

CHISINAU (Reuters) -Moldova will pay its January gas advance to Russia's Gazprom on time, Moldovan Prime Minister Natalia Gavrilita said on Wednesday.

Earlier in the day, the cabinet said Russia's Gazprom rejected Moldova's request to reschedule its January gas payment, forcing the country to introduce a state of emergency in its energy sector.

Moldova and Gazprom agreed a five-year contract that began on Nov. 1. and requires a prepayment by the 20th of each month.

Deputy Prime Minister Andrei Spinu said initially the country was able to pay $38 million of a bill of $63 million, but later Gavrilita said Moldova would draw on budget funds to pay the full amount.

"The government has found ways to pay... Gazprom an advance payment for January in the amount of $63 million on time," Gavrilita said after a government meeting.

She said the government would defer VAT payments for the Moldovagaz company and transfer to the company budget funds that were previously intended to compensate the population for high tariffs.

The government said it would ask parliament on Thursday to introduce a state of emergency, giving it broad powers to manage the energy sector, such as switching gas supplies from industry to households and using budget funds to pay for the fuel.

Kremlin spokesman Dmitry Peskov said on Wednesday that Russian gas sales to Moldova were a commercial matter between Gazprom and the former Soviet republic, but gas was being delivered and needed to be paid for.

The small ex-Soviet republic introduced an emergency situation in the energy sector for 30 days in late October.

Gazprom announced its readiness to halt supply in November after Moldova delayed a prepayment. To resolve the crisis, the Moldovan parliament amended the budget to pay the debt.

(Reporting by Alexander Tanas and Dmitry Antonov, writing by Pavel Polityuk; editing by Jason Neely, David Evans and Barbara Lewis)