Ukraine, Russia Fail to Resolve Dispute

MOSCOW, Russia -- The energy ministers of Ukraine and Russia on Wednesday failed to resolve a politically charged dispute over Russia's plans to raise the price of natural gas exports to Ukraine.

The two officials left late-evening negotiations in Moscow without a deal, but talks were to resume Thursday, Ukrainian Energy Minister Ivan Plachkov said.

Russia is threatening to cut off supplies within days unless Ukraine accepts its demands to pay more than four times the current price for gas imports.

"We agreed to break until tomorrow," Plachkov said in footage shown on NTV television, adding that compromises in the nations' positions are essential.

"Of course" compromises are possible, Plachkov said in response to a reporter's question. "There is no way to do without movement and compromises."

Russia's state-controlled Gazprom natural gas monopoly says it is prepared to shut off gas to Ukraine on Jan. 1 a major holiday in both countries unless Ukraine accepts the price increase.

Hours before the talks between Plachkov and Russian Fuel and Energy Minister Viktor Khristenko, Ukrainian Prime Minister Yuriy Yekhanurov denounced the Russian demand as unacceptable pressure against his country.

About a third of Ukraine's natural gas comes from Russia, and Ukrainian officials say raising the price from the current $50 per 1,000 cubic meters could cripple Ukraine's energy-intensive heavy industry and impede the country's efforts to boost its economy.

Gazprom argues that Ukraine should pay $220 to $230 more in line with world prices and portrays the demand as a justifiable move to scrap energy subsidies enjoyed by former Soviet nations.

Kiev has asked for the increases to be phased in over five years instead of all at once.

Yekhanurov warned Tuesday that Ukraine could divert some of the Russian gas supplies going to Europe, calling it Ukraine's right to take 15 percent of those shipments passing through its territory to European markets. Gazprom said such action would amount to theft.

Source: AP


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