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Ukraine, Russia take up deepening gas row
(AFP)
Updated: 2005-12-28 09:17
The presidents of Ukraine and Russia discussed a deepening dispute between
their countries over gas prices and supplies, a standoff nervously eyed in
western Europe, which depends on the two nations for a large part of its gas
imports.
Russia's Vladimir Putin and Ukraine's Viktor Yushchenko discussed the row
during a telephone call and agreed that the Ukrainian fuel and energy minister
would visit Moscow for further negotiations on the dispute on Wednesday, said a
statement from the Ukrainian presidency.
Yushchenko reiterated his earlier stance that Kiev "is in favor of
liberalizing prices for supplies and transit of Russian gas and that a formula
for these prices should be based on European principles," the statement said.
Russia wants to more than quadruple the price it charges Ukraine for gas to
bring it in line with world market rates as of January 1. Kiev has been arguing
for a phased increase over several years.
Tuesday's conversation came after the two nations exchanged another round of
verbal salvoes in their increasingly rancorous gas dispute, and against a
looming January 1 deadline that Moscow has set for Kiev to either agree to a
price hike or face a cutoff of gas supplies.
'Blackmail on gas won't cut it!' shout people
during a rally at the Russian embassy in Kiev organised by Congress of
Ukrainian Nationalists. [AFP] | Western Europe is
closely following the row as nearly one fifth of its gas imports come from
Russia via Ukraine.
Tuesday's exchanges were sparked when Ukraine's Prime Minister Yury
Yekhanurov insisted that Kiev had a contractual right to take 15 percent of
Russia's gas exports bound for Europe that pass through Ukrainian territory.
"If a thousand cubic meters pass through Ukraine's borders, then 150 of them
are ours as payment for gas transit," Yekhanurov told Ukrainian television.
"That is what's written in the contract, that is the legal formula and that
is our uncontested right, Ukraine's legal right. We take 15 percent of gas for
transit through our territory."
Russia's state-owned Gazprom monopoly slammed the statement.
"This irresponsible and legally ignorant announcement is aimed at escalating
tension in Russian-Ukrainian relations and undermines Europe's trust in Ukraine
as a transit country," it said in a statement.
"All of Ukraine's actions on siphoning off gas after January 1, 2006 will be
regarded as... theft," said Sergei Kupriyanov, a Gazprom spokesman.
Viktor Yushchenko (R) with Russian President
Vladimir Putin in Kazan, in August
2005.[AFP] | "All responsibility for shortage of Russian gas supplies to European
customers will lie completely with the Ukrainian side," he said.
Russia's Industry and Energy Minister Viktor Khristenko in his turn said that
Russia would make no more offers to Ukraine on a new pricing agreement.
Meanwhile Ukraine's ex-premier and formerly a powerful businesswoman in the
gas sector, Yulia Tymoshenko, urged Kiev to stand firm, arguing that the dispute
was "a cold shower which should have Ukraine realize where her interests lie and
learn to defend herself."
"We must not sign any contracts or agreements with Russia. As of now our
financial balance layouts until 2009 have us get gas for 50 dollars per 1,000
cubic meters," Tymoshenko said as quoted by the ITAR-TASS news agency, adding
that "whoever signs this will be a traitor to Ukraine."
Moscow has said that if a new agreement on gas prices is not signed before
the new year, it would stop supplies to the Ukrainian domestic market, a move
that would leave Ukraine without about a third of its annual energy needs.
The opposing statements from Kiev and Moscow stem from different
interpretations of two agreements that currently regulate the gas market between
the two countries -- an intergovernmental protocol renewed every year and a
long-term contract between the nations' state-owned energy firms.
Russia says that if the government protocol is not signed before January 1,
it will not have a legal basis for supplying gas to Ukraine.
Ukraine says that if the protocol is not signed, the terms of the long-term
contract between Russia's Gazprom and Ukraine's Naftogaz will remain in force.
These terms lay out a barter system, under which Russia has provided Ukraine
with gas as transit fees for its European gas exports, with a base price of 50
dollars (42 euros) per 1,000 cubic meters (35,316 cubic feet).
Russia wants to switch to cash payments and bring the price of Ukrainian gas
supplies to world market levels, which it says are around 220-230 dollars per
1,000 cubic meters.
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