Ukraine Faces 37-Percent Rise in Price of Russian Gas: Yanukovych

Ukraine faces a 37-percent increase in Russian gas prices from 2007, Prime Minister Viktor Yanukovych said Wednesday, Interfax Ukraine reported.

The increase would present Ukraine with a gas bill more than two and a half times higher than a year ago, although the increase is still substantially less than what Russian gas giant Gazprom had once demanded.

"Today we are already 100 percent sure that gas will be no more than 130 dollars (104 euros) at the Ukrainian border," Yanukovych said at a meeting of cabinet ministers, refering to the price for 1,000 cubic meters of gas.

Ukraine currently pays 95 dollars per 1,000 cubic meters for Russian gas as part of a temporary resolution to a pricing dispute leading Moscow briefly to cut off supplies last January.

The row broke out when Gazprom ended a subsidised deal in which Ukraine paid just 50 dollars and demanded what it said was the open market price of 230 dollars.

Yanukovych said that a final price would be announced after a joint government meeting between the two ex-Soviet states on October 24.

"There has been a dialogue between the ministry of energy and Russia's Gazprom, and it was decided that all necessary documents and contracts would be signed at the meeting," the Ukrainian PM said.

The question of gas prices is a critical one for Russian-Ukrainian relations, as virtually all of Ukraine's energy imports come from Russia, and 80 percent of Russian gas supplies to Europe pass through Ukraine.

The January dispute and Russian cut-off led to knock-on supply shortfalls in western Europe and fears in the European Union about Russia's reliability as an energy supplier.

Gas price negotiations have also been seen as a test for Yanukovych, who has close ties to Russia but also relies on gaz-guzzling Ukrainian industrial backers for political support.

Source: AFP

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