Ukraine Ready to Pay Market Prices for Gas in Second Quarter – Minister

Text of report by Interfax-Ukraine news agency

Kiev, 31 December: Ukraine is ready to move to market prices for Russian gas from the second quarter of 2006, Fuel and Energy Minister Ivan Plachkov told Interfax-Ukraine on Saturday evening [31 December].

He said that the sides will sign the corresponding package of documents during the first quarter of 2006, after the “price formula” and the fee for transit of Russian gas across Ukrainian territory are finally agreed.

“There will be gas,” Plachkov said.

Earlier on Saturday, Russian President Vladimir Putin instructed Gazprom and the government to deliver gas to Ukraine during the first quarter of 2006 at the price for 2005 if by the end of 31 December Kiev signs an agreement on going over to market prices for gas from the start of the second quarter of 2006.

[Gazprom has demanded that Ukraine pay 230 dollars per 1,000 cu.m. of gas in 2006.]

In 2005, Naftohaz Ukraine received gas from Gazprom in payment for transit services at a price of 50 dollars per 1,000 cu.m. The discounted fee for gas transit across Ukrainian territory for Gazprom was 1.09375 dollars for 1,000 cu.m. for 100 kilometres.