Russia, Ukraine may negotiate gas prices this week

Russia and Ukraine may hold negotiations this week which would include talks on the price for natural gas by Sunday, not in the next two weeks as Prime Minister Nikolai Azarov had said, Ukrainian President Viktor Yanukovich said late Monday, as cited by RIA Novosti.

“There is an agreement with the Russian government to sit at the negotiation table already this week,” Yanukovich said in an interview with local television channels.

“We hope to agree with Russia and revise our strategic contract,” he said.

Heavily dependent on Russian gas imports, Ukraine has been striving to revise Gazprom’s gas prices, which it considers excessive. Kiev is trying to find alternative sources of gas and increase its own production.

Ukraine, which has cut purchases from gas giant Gazprom between January and October, is ready to restore the volume, if Moscow cuts prices, Yanukovich said.

“They have started losing the Ukrainian market, it is unprofitable for them to do it; and today, when we are holding talks on gas issues …they ask us: are you ready to resume the Ukrainian gas market for Russia? We say we are, but under one condition, that you will cut our gas price,” Yanukovich said.

He said earlier that a fair gas price for Ukraine is U.S. $300 per 1,000 cubic meters. At present, the price is $410 per 1,000 cubic meters, accounting for a discount granted by Moscow for keeping its fleet on the Ukrainian part of the Black Sea.

In the first 10 months of the year Ukraine decreased gas imports by 15.9% on the year to 23.35 billion cubic meters. Domestic gas consumption shrank 5.6% on the year to 38.85 billion cubic meters in the same period.

Yanukovich said separately that Russia’s criticism that Kiev had failed to respect Moscow’s interests during the association talks with the E.U. was justified.

Moscow and Kiev had been at loggerheads over Ukraine’s intention to sign the association deal with the E.U. saying that Ukraine cannot concurrently be a member of the E.U. and a member of Russia-led trading blocs.

On November 21 the Ukrainian government abruptly called off preparations to sign an association agreement with the E.U., which was scheduled for November 29, stunning the E.U. and igniting pro-European protests.

Kiev attributed the suspension to its decision to develop economic relations with Russia and countries of the CIS.

Yunukovich said that Kiev will resume talks with the E.U. on the terms and conditions of the association agreement and a free trade zone in the nearest time.

SOURCE: PRIME, 2013

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