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Russian PM explains Ukraine gas row to foreign media

January 09, 2009 | RBC

Ukraine must pay the market value for natural gas, while Russia is ready to pay the arm's length price for transit, as well, Russian Prime Minister Vladimir Putin announced during a meeting with international reporters. According to Putin, since Ukraine is not honoring its agreements, it should pay the market value. In this case, Russia is prepared to pay $3.4 per 1,000 cubic meters of gas transited through Ukraine. Putin stressed the need to switch to "normal, civilized market relations." He also said he was perplexed by Ukraine's statements insisting on receiving gas at prices that are lower than those charged to its neighbors. According to Putin, this is having a direct impact on certain economic sectors of its neighboring countries, making them uncompetitive.

The PM also noted that Russia was still willing to sign a direct contract with Naftogaz of Ukraine, but said his impression was that some corrupt forces hindered the deal when Russia proposed supplies at $250 per 1,000 cubic meters directly through Naftogaz.

During the meeting, Putin also commented on who the owners of RusUkrEnergo, the current import-export middleman, are, and called on the European Commission to promptly send its gas transit monitors to Russia and Ukraine.

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