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Ukraine Says New Gas Prices Are Tolerable

The Ukrainian president's office announced Tuesday that Ukraine will be able to cope with the prices for gas to be fixed under the new agreements with Russia

Ukraine Says New Gas Prices Are Tolerable

"The Ukrainian economy will cope with these gas prices, the more so since the government has drafted a number of compensatory measures," Oleksandr Shlapak, a deputy chief of the Ukrainian president's office said.

He said Ukrainian companies had bought gas at $350 to $400 depending on their location last year. The official added that subsidies also enabled such companies to offer low tariffs to the population.

Viktor Yanukovych, leader of Ukraine's opposition Party of Regions, expressed doubt on Monday that the Ukrainian economy could cope with the higher prices. "We thought a price somewhere between $230 and $250 would be the maximum," he said.

Ukraine paid $179.5 per 1,000 cubic meters of gas in 2008. Russian energy giant Gazprom had insisted on a market price of $450 for 2009.

Shlapak said he felt "disappointed and exhausted" over the results of the Moscow talks between the two countries' premiers.

Shlapak's boss, Viktor Baloga, described the gas agreements reached in Moscow as "nontransparent."

"The gas agreement reached by Ukrainian Prime Minister Yulia Tymoshenko and her Russian counterpart Vladimir Putin raises a lot of questions ... both due to the nature of bilateral talks and nontransparent decisions," the chief of the Ukrainian president's office said.

The Gazprom chief, Alexei Miller, warned earlier on Tuesday that his company would make Ukraine switch to 100% prepayments if it failed to pay for Russian gas supplies on time.

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