Talks fail to resolve Ukraine-Russia gas dispute
Updated: 2005-12-29 09:47
The energy ministers of Ukraine and Russia failed to resolve a dispute
over Russia's plans to raise the price of natural gas exports to Ukraine.
The two officials left negotiations in Moscow late Wednesday 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."
Gazprom natural gas monopoly says it is prepared to shut off gas to Ukraine on
January 1 _ a major holiday in both countries _ unless Ukraine accepts the price
Graphic showing gas
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 US$50 (euro42) 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 US$220-230 (euro186-194) _ 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.
Protesters hold flags of the Congress of
Ukrainian Nationalists party during a protest against Russia's plans to
increase gas prices for Ukraine, at the Russian Embassy in Kiev, Ukraine,
Tuesday, Dec. 27, 2005. [AP]
Ukraine has pointed out that other ex-Soviet republics such as Georgia and
Armenia have had their gas tariffs raised far less _ to just US$110 (euro93) per
1,000 cubic meters.
Belarus, a Russian ally, reached agreement with Gazprom Tuesday to receive
gas for US$46.68 (about euro37) per 1,000 cubic meters _ just 20 percent of what
the company wants Ukraine to pay.
Ukraine's relations with the Kremlin have been tense since last year's Orange
Revolution when reformist President Viktor Yushchenko came to power on a
platform of moving Ukraine into closer integration with the West and away from
The gas dispute comes just months before parliamentary elections in Ukraine
in which the party of last year's losing presidential contender, the
Kremlin-backed Viktor Yanukovych, is poised to perform strongly.
He has accused Yushchenko of provoking the dispute needlessly by souring ties
with Russia through his pro-Western drive. Under constitutional changes in
Ukraine, the winning party will choose the next prime minister who will have
expanded powers at the expense of the presidency.
Ukraine uses almost 80 billion cubic meters (104 billion cubic yards) of gas
annually, receiving 25 billion cubic meters from Russia, and 36 billion cubic
meters from Turkmenistan, pumped via Russia. Ukraine itself produces some 18
billion cubic meters.
Yekhanurov warned that he had ordered Ukraine's Naftogaz company to prepare a
motion against Gazprom before the Arbitration Institute in Sweden, claiming the
Russian side intends to violate existing contracts. The arbitration body cannot
undertake the case unless both parties request it.