Russia Won't Concede

Relations between Russia and Ukraine are facing a potentially major rupture over the price of natural gas, Mosnews.com reported.

Russia?s state-controlled energy giant Gazprom is moving to raise Ukraine?s annual bill by more than $1 billion by ending below-market prices that were part of an effort to maintain the Kremlin?s influence with its neighbor.

The dispute comes as Gazprom is set to raise gas prices for a number of other former Soviet republics, including Georgia and Moldova, which have turned away from Russia in favor of the West, and the three Baltic states, now members of NATO and the European Union.

?The time when we built relations by quasi-subsidizing neighboring economies is gradually passing,? Russian Finance Minister Alexei Kudrin was quoted as saying by the RIA Novosti news agency this week. ?We must think about our own interests.?

This week, Gazprom said it was tired of what it called Ukrainian foot-dragging in the talks. It said that if no deal was reached, starting Jan. 1 it would unilaterally charge $200 to $230, the price it obtains in Western Europe. That would push the extra cost to Ukraine well over $1 billion a year.

?Ukraine has wasted time in these talks, and now there can be no talk of $160,? Alexander Medvedev, deputy chairman of Gazprom, said on Russian television. ?The market situation has changed, and it?s continuing to change.?