Ukraine refuses to pay over $179.5 for 1,000 cu m of gas

10:14, 12 March 2008
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Tymoshenko gave strict instructions to Naftogaz

Kyiv refuses to pay over $179.5 per 1,000 cubic meters for the Russian natural gas it has consumed in 2008, the Ukrainian premier said on Tuesday ahead of talks with Russia on a long-running gas dispute, according to Budapest Business Journal.

The former Soviet allies partially resolved their dispute last Thursday, agreeing that Ukraine would pay off about $1 billion of its debt and that talks would continue on a supply scheme for 2008. The agreement came after Russian gas monopoly Gazprom had restored gas supplies - cut by 50% early last week - to Ukraine. The parties are to resume talks on Wednesday.

Yulia Tymoshenko said strict instructions had been given to Ukraine’s state gas company Naftogaz not to pay more than $179.5 per 1,000 cubic meter of natural gas consumed in 2008. “There can be no other price than $179.5,” a Ukrainian government spokesman quoted Tymoshenko as saying. The Ukrainian premier is currently on a working visit to Brussels. Tymoshenko also said that under the instructions Ukraine would pay a maximum of $130 for every 1,000 cubic meters of gas consumed last year.

The latest spat between Moscow and Kyiv raised fears among gas consumers that Ukraine could tap gas destined for shipment to Europe to make up for the shortfall brought about as a result of Gazprom’s cuts. The former Soviet allies agreed last year to supply gas at $179 for 1,000 cubic meters (cu m.) in 2008 for Central Asian gas brought by Gazprom. The price for Russian gas was set at $315 per 1,000 cu m. Referring to officials in the national energy companies of Uzbekistan and Turkmenistan and Kazakhstan, Gazprom said earlier in the day that the ex-Soviet Central Asian states would begin exporting their natural gas at European-level prices from 2009.

Gazprom buys Central Asian gas at lower prices than it sells to Europe. The planned increase therefore promises an according price rise for European consumers.

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