Ukraine Deputy Leader Rules Out Making Russia Pay More For Ukraine's Gas Pipelines

KIEV, Ukraine Ukraine will not threaten a price rise for Russia's use of its gas pipelines as leverage to secure a lower price on gas imports from Moscow, Ukraine's deputy prime minister said Friday.

Mykola Azarov

Mykola Azarov told students at Kiev National University that such a move would backfire.

"If we raise the price, Russia will do the same on its vector," Azarov said.

Ukraine imports gas from Russia and Central Asia via pipelines that flow through Russian territory. Europe gets about a quarter of its gas from Russia, some 80 percent of that arriving in pipelines that cross Ukraine.

Ukraine and Russia are currently in talks over gas prices for next year, and Azarov has said that Ukraine is expecting another increase.

This year, Ukraine was forced to accept a twofold price increase to US$95 (€74) per 1,000 cubic meters after a bitter pricing dispute with Moscow. Russia temporarily cut off supplies to Ukraine, which triggered a shortfall in Europe.

The gas price deal also included a 47 percent increase in the transit fee that Ukraine charges Russia to use its pipelines to S$1.60 (€1.25) per thousand cubic meters to travel 100 kilometers. That price was fixed for five years, unlike the price for gas supplies.

Azarov said that while he was crafting next year's state budget on the assumption that Ukraine would pay US$135 (€106) per 1,000 cubic meters that year, he remained hopeful that Kiev would manage to secure a lower price.

"Our negotiators in the talks with Russia have a strong position," he said, without elaborating.

Source: International Herald Tribune