Ukraine Threatens To Sue Russia Over Gas

KIEV, Ukraine -- Ukraine will take Russia to court if Moscow does not agree by mid-October to lower the price it charges Kiev for gas, a top Ukrainian official said Wednesday in the two countries' latest energy spat.

"If we do not reach an agreement, Ukraine will go to court," the senior official told reporters on condition of anonymity.

Ukraine has been trying for months to renegotiate the terms of a controversial 2009 gas deal that it signed with Russia to settle a dispute that saw its supplies cut off in a Kremlin move that also affected other parts of Europe.

The 10-year deal sets higher prices for Ukraine than some EU members states and has been condemned by members of President Viktor Yanukovych's new government.

It provides for disputes to be referred to the Stockholm court of arbitration.

Yanukovych's political rival Yulia Tymoshenko is in detention and on trial on charges of abuse of power for signing the deal while prime minister.

Yanukovych had an unproductive meeting with Russian President Dmitry Medvedev in August and later sent his energy minister to Moscow for more talks.

Russia has said it was willing to lower the price from the $400 Ukraine currently pays for 1,000 cubic metres, if Kiev joined a new Moscow-led customs union and gave up a 50 percent stake in its state energy company Naftogaz.

Ukraine has flatly rejected the idea and insists it remains interested in EU membership within the next 10 years.

Russian President Dmitry Medvedev reiterated Moscow's position on Wednesday, saying Kiev wanted "non-stop indulgence" from Moscow.

"It seems to me that we have made a clear proposal: if you want gas at a lower price, you must be part of the common area (union)," he was quoted as saying by the Interfax news agency.

"If you do not want that, make us a commercial proposal that is advantageous to Russia ...," the agency quoted him as telling journalists.

But "they don't want the one or the other," the president said.

The Ukrainian official has said the negotiations must be concluded before the start of the season of highest heating demand, thus by mid-October.

Source: EU Business