Ukraine Doesn't Know What To Do

The Ukrainian cabinet reappointed the head of the national state gas company at the center of a price conflict with Russia, the company, Naftogaz, Mosnews.com reported yesterday.

Olexiy Ivchenko on Friday lost the post of first deputy fuel and energy minister, which he had combined with the job of Naftogaz chief, and some Russian media speculated that the move indicated a possible softening of Ukraine?s position in tense gas talks.

But Ukrainian officials said the shuffle was part of changes underway at the ministry, and the elimination of the dual position. Under the changes, the first deputy post will no longer be filled by the head of Naftogaz.

Ivchenko had been a key player in Ukraine?s difficult gas negotiations with Russia, which have grown increasingly strained as the new year approaches without a deal.

Moscow has proposed more than tripling the price of gas from the current $50 per 1,000 cubic meters, a proposal rejected by Ukraine. The dispute could jeopardize supplies of Russian gas to the European Union, which gets almost half of its gas imports from Russia, mostly piped through Ukraine.

Ukraine has said it would support only a gradual increase in the cost, warning that a sharp rise could jeopardize the country?s economy. Security Council chief Anatoliy Kinakh said that if the price goes above $95 (80 euros) per 1,000 cubic meters, Ukrainian factories will stop being profitable.

Ukraine?s Fuel and Energy Minister Ivan Plachkov was expected to head to Russia Monday for the latest round of negotiations.