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Russia's Gazprom Warns Ukraine Against Rejecting Gas Price Offer

Gazprom wants Ukraine to triple the amount it pays for its natural gas (AFP) 30 November 2005 -- Russia's state-controlled energy company Gazprom has warned Ukraine that it could raise its price for natural gas even higher if Ukraine does not accept an offer of $160 dollars per 1,000 cubic metres for next year.

Gazprom Deputy Chairman Aleksandr Medvedev told journalists in Moscow today that even that price was a "compromise offer" that was far lower than European market rates.

"I think Ukraine has enough qualified economists to be able to calculate the difference between the current European prices and the price that so far is being proposed by Gazprom," Medvedev said.

"If this price is not accepted, then we'll make another offer. And it will not be lower, it will be higher."

Russia and Ukraine are locked in a bitter dispute over the price for Russian gas supplies. Currently, Ukraine pays $50 dollars for 1,000 cubic metres in exchange for allowing Russia to pump gas through its pipelines to western Europe.

Russia wants Ukraine to pay market prices. The average price for natural gas in western Europe is currently about $200 per 1,000 cubic meters.

Russia has warned that a lack of agreement with Ukraine could jeopardize gas supplies to Western Europe. Gazprom supplies one-quarter of Europe's natural gas.

Ukrainian Prime Minister Yuriy Yekhanurov said today that Ukrainian and Gazprom officials will meet for talks in Moscow on 5-6 December.


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