Reports: Russia and Ukraine agree on big gas price cut

Nov 16, 2011, 12:01 GMT

Kiev/Moscow - Ukraine and Russia have agreed to a dramatic cut in the price of gas sold to Kiev, and the deal will be signed in the coming weeks, according to a news report Wednesday.

The Interfax news agency cited a Ukrainian government official participating in energy talks with Moscow, who said: 'The agreement on gas is done. The appropriate documents will be signed in the near term.'

The report followed a Monday article in the Ukrainian web magazine Ekonomicheskie Izvestiya that predicted Russia and Ukraine will reduce the price of gas sold to Ukraine from the present 400 dollars per thousand cubic metres to some 230 dollars, with the deal to be signed by December.

Dmitry Peskov, a spokesman for Russian prime minister Vladimir Putin, confirmed talks were in progress on the final details of the text of an energy agreement with Ukraine, but cautioned that, until a deal is signed, there would be no official Russian comment.

Disputes between Ukraine and Russia over the price of gas sold to Ukraine, and pipeline transit fees paid to Ukraine to ship Russian product westward, have brought Russian gas shipments to European nations to a near-total halt twice: in 2006 and 2009.

Ukrainian President Viktor Yanukovych, who is allied with many of the country's politically powerful industrial bosses, has said Russia must reduce the contracted price of gas sold to Ukraine, because high gas prices harm both countries' economies.

Gazprom executives have said they would be willing to reduce the price of gas sold to Ukraine if Ukraine agrees to sell a controlling stake in its natural gas transportation network.

Yanukovych, though an outspoken supporter of close economic ties between Ukraine and Russia, has said Ukraine's state-owned gas transportation network is not for sale.

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