Sources in Ukraine reported that Russia has cut of all gas supply connections to Kiev as the political dispute is spinning out of proportion. Ukrainian energy minister Yuri Prodan said the gas supplies to Ukraine was reduced to zero early this week.

Russia's state gas supply firm Gazprom said they cut off the gas supplies because Ukraine had a huge debt to clear for earlier supplies. Sources in Ukraine said Gazprom has urged the country to clear USD1.95 billion out of USD4.5 billion debt.

The company said supplies to Europe would not be affected. The company sources have however expressed doubts about the safety of gas transits to Europe through Ukraine. The diplomatic ties between Ukraine and Russia have suffered since Russia's annexation of Crimea.

The west and EU has demanded Russia to contain protests by pro-Russian separatists in eastern Ukraine. But the protesters are well out of control of Russian government and Kiev has alleged that Moscow is backing separatists in the country. Pro-Russian separatists have taken hold of government buildings in the eastern city of Donetsk including the region treasury.

Those buildings captured last week include Ukraine's National Bank building. Gazprom sources said in a statement on Monday that Ukrainian companies will be disbursed natural gas only in the amounts it repays back to the supplier. Russian sources have dismissed political speculation in Gazprom’s decision and claimed that it was only business oriented.