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Russia, Ukraine Refuse To Budge On Gas Dispute

28 November 2005 -- Russia's state-controlled energy company Gazprom today offered to sign a contract with Ukraine under which Ukraine would receive European rates for the transit of Russian gas to Western Europe.

A Gazprom spokesman said the company had proposed to sign a contract on transit with Ukraine without waiting for an agreement on gas deliveries.

Ukraine's state-owned Naftohaz Ukrayiny company swiftly rejected the Russian plan, saying Ukraine is satisfied with the current terms of payment for the transit of Russian gas.

Russia and Ukraine are locked in a bitter dispute over the price for Russian gas.

Currently, Russia pumps gas to countries in Western Europe through Ukrainian pipes and, in turn, Ukraine gets a heavy discount on gas it buys for its own needs. Russia wants to increase the price of gas supplies to Ukraine by more than 300 percent.

As the dispute escalated, Russian Prime Minister Mikhail Fradkov abruptly put off a planned visit to Kiyv last week.