Ukraine Seeks To Lower Price Of Russian Gas “By At Least $1” - Yanukovich

KIEV, Ukraine -- Ukrainian government intends to abide by natural gas agreements the country signed with Russia in January 2006, Ukrainian PM Viktor Yanukovich said on Monday, Aug. 14.

PM Viktor Yanukovich

The price of natural gas, an important factor for Ukraine’s economy, has been a contentious issue between the ex-Soviet neighbors during Western-leaning President Viktor Yushchenko’s time in office.

Members of Ukrainian opposition have strongly opposed the pricing system agreed to at the beginning of the year, by which the country pays roughly double the former rate for gas supplies from Russia.

“We are not planning to review natural gas contracts with Russia for 2006, but we will be seeking transparency in our cooperation next year,” Yanukovych, who is widely expected to pursue closer economic ties with Moscow, told a press conference.

He said that changes in gas cooperation were possible only if Russia agreed to cut the price for its supplies to Ukraine. “If we manage to lower the price by at least a dollar, it will be a success,” Yanukovych said, quoted by RIA Novosti.

It was reported earlier that Yanukovych would discuss natural gas prices with Russia during his visit to Moscow, scheduled for August 15-16.

Currently, Ukraine is receiving a mixture of Russian and cheaper Turkmen gas for a price of $95 per 1,000 cubic meters under an agreement that ended a pricing spat with Russia in late 2005 and early 2006.

The price formula was based on a rate of $230 for Russian gas and $60 for the Central Asian republic’s gas. However, the agreement was only valid for the first half of 2006.

Since then Turkmenistan has already raised the price of the gas it sells to Russia to $95 per 1,000 cubic meters, prompting speculations that the new price of gas exported to Ukraine will be equal to roughly $140.

Russia’s natural gas monopoly Gazprom seeks to raise prices for Ukraine and other former Soviet republics to European levels, which was the reason behind the New Year dispute.

At the time, the gas monopoly suspended its supplies, prompting Ukraine to call the move blackmail, while Russia in turn accused its neighbor of tapping gas intended for European markets.

Source: MOS News