Ukraine’s president vows to abide by gas deal

Ukraine’s president vows to abide by gas deal

Viktor Yushchenko has promised not to wreck an accord with Russia that restored the flow of gas last week to European businesses and consumers, even though he personally objects to the terms set out in the deal...

Viktor Yushchenko, Ukraine’s president, has promised not to wreck an accord with Russia that restored the flow of gas last week to European businesses and consumers, even though he personally objects to the terms set out in the deal.

“I’ll say frankly that Ukraine is not happy with the decisions made to settle the crisis. It’s a bad deal,” Mr Yushchenko told the Financial Times in an interview. “But I want to say firmly and clearly – for us, this is a responsibility that we will not violate. Our partners should have no more headaches on this score.”

Aides to Mr Yushchenko have suggested that Ukraine may attempt later this year to renegotiate the accord, which was clinched in Moscow last week after talks between Vladimir Putin, Russia’s prime minister, and Yulia Tymoshenko, Ukraine’s prime minister and a bitter rival of Mr Yushchenko.

Under the deal, Ukraine will pay Russia $360 per 1,000 cubic metres of gas in the first three months of this year, a sharp increase from $179.50 last year but representing a 20 per cent discount on a so-called “market price” of $450.

By contrast, the transit fee paid by Russia to Ukraine for sending gas to the rest of Europe will remain unchanged this year at $1.70 for 1,000 cubic metres of gas per 100km.

Gazprom, the giant Russian gas company, says this fee will rise next year to about $2.50. But Mr Yushchenko complained that it would still be much lower than the $4 fee paid to the Czech Republic and Slovakia and the fee of up to $6 received by Germany.

He rejected suggestions that his criticism of the Moscow deal reflected a desire to protect RosUkrEnergo, a Swiss-registered company that operates as an intermediary in the Russian-Ukrainian gas trade but would apparently be cut out under the new arrangements.

“The Ukrainian state and Ukrainian state gas company have nothing to do with these intermediaries,” he said, denying that he or his political party had any connection with RosUkrEnergo.

Speaking in Brussels, where he was holding talks on Tuesday with European Union leaders, Mr Yushchenko assailed Mr Putin for having alleged during the gas crisis that rampant corruption in Ukraine’s government structures had caused confusion in Kiev’s negotiating strategy and made it harder to find a solution.

“Russian corruption is bigger in scale than anywhere in Europe. Such harsh statements [about Ukraine] are simply incorrect,” he said.

“The myths cranked out by the Russian government or Gazprom are apparently aimed at discrediting Ukraine as a reliable gas transport partner, to get political and commercial control of the Ukrainian gas system,” he said.

Denying allegations that Ukrainian technicians had secretly siphoned off gas that Russia had intended only for other European customers, Mr Yushchenko said: “Ukraine was never stealing, doesn’t steal and will never steal gas.”

Both Ukraine and Russia came under heavy criticism in Brussels for their roles in the dispute, which severed gas supplies to the EU during a mid-winter cold snap. But Mr Yushchenko said he did not believe Ukraine’s reputation or relations with the EU had suffered any damage at all.

“I would say that the gas crisis even makes the impetus for integration stronger,” he said, expressing the hope that the EU and Ukraine would later this year sign a free trade agreement and a common air space accord.

“We need to draw many conclusions from these damaging events. As a citizen of Europe, I say Europe must have a common gas policy, a united gas system, with rules and procedures for producers, transit countries and consumers.”

By Tony Barber, The Financial Times

If you see a spelling error on our site, select it and press Ctrl+Enter