Ukraine wants drastic price increase for gas transit
Ukraine has warned it will be forced to charge Russia six times more to pipe gas into Europe. A Kiev court has ruled that the current contract with Russia for the transit of gas is invalid. This comes as some European countries are reporting a drop in gas supply.
The lawsuit was filed by the Ukrainian Energy Ministry, to which the court gave its approval. The contract was signed by the head of Ukraines energy giant Naftogaz, who, according to the court, had no power to do so as he had not been authorized by the Cabinet.
At the current transit price Russia pays Ukraine $US 1.6 per 1,000 cubic metres for every hundred kilometers.
The head of the State Duma s International Affairs Committee, Konstantin Kosachev, has stated Ukraine has no legal basis and that only the International Court of Arbitration in Stockholm can decide on this matter.
This is a decision that cannot be taken by a national court. If Naftogaz follows this decision, this will be a disaster for cooperation between Russia and other European countries, Kosachev said.
Europe concerned
An urgent EU meeting has been held on Monday in Brussels to discuss the gas row between Russia and Ukraine.
Europe has called on both countries to come to terms as soon as possible and to safeguard gas supplies to European customers.
The situation has not reached any critical point. European consumers have not been affected. Theres no immediate threat to them. A number of European states have report drops in pressure and in volume of gas supplies, but they have been able to make up for them through other suppliers and through their own stocks. However, we do feel that the situation is quite serious and the two sides need to come to a conclusion immediately, and they need to immediately resume gas supplies in accordance with their commitment, Radek Honzak spokesperson for the Czech permanent representation, told RT.
Tug of war
The Russian energy company Gazprom blames Ukraine on illegally siphoning fuel.However, Ukraines Naftogaz officials firmly deny Russias accusation and in turn point the finger at Moscow.
"The transit is not suffering but there are a number of technical difficulties, said Valentin Zemlyansky, a spokesperson for Naftogaz. Mainly because a new agreement hasnt been signed with Gazprom. We can not pay the customs fees without it and the transport systems of Russia, Ukraine, and the EU aren't synchronized."
In the course of earlier negotiations, Ukraine disliked Russias offer of $US 250 per 1,000 cubic metres of gas, which is almost half the market price.
In turn, Russia raised the price to a standard European market cost of US $418 per 1,000 cubic metres which Ukraine again declined.
With no agreement made by the New Year, Russia subsequently cut off gas supplies to Ukraine.
Kiev says that after Gazprom stopped the supplies, the transportation system started to break down.
Still, President Yushchenkos advisor on energy security Bogdan Sokolovsky believes that they can maintain normal transit for less than two weeks.
"If Russia continues to hold back gas supplies to Ukraine, in just ten days there could be serious setbacks, he said. The transit to Europe could be seriously affected. Ukraine is not to blame."
Added: January 5, 2009
