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8 September 2006 -- Gazprom and Ukraine's fuel and energy minister reportedly agreed Thursday on how to resolve the country's gas deficit in the fourth quarter, the Russian energy giant said.
Russia is Ukraine's leading natural gas supplier but dialogue in the gas sector has been complicated by Gazprom raising natural gas prices to the market level from 2006 and a recent political crisis that befell Russia's neighbor in the past six months.
The price of natural gas has been a contentious issue with Russia during West-leading President Viktor Yushchenko's time in office since 2004. It is also an important factor for Ukraine's economy, which is driven largely by the fuel-intensive heavy industry.
Ukraine currently imports a mixture of Russian and Turkmen natural gas at $95 per 1,000 cubic meters. The price formula is based on a European rate of $230 for Russian gas and $60 for the Central Asian republic's gas. Gazprom agreed to a 50% price rise to $100 per 1,000 cubic meters for its supplies from Turkmenistan this week.
During the price spat with Ukraine in January, Russia briefly cut off gas supplies to Ukraine, and later Gazprom accused Ukraine of siphoning off Europe-bound gas during the halt in supplies. The situation aroused concerns in Europe about Russia's reliability as a gas supplier.
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