Putin: Ukraine can afford to pay gas price :: Charter'97 :: News

Russian President Vladimir Putin struck a hard line Thursday in a dispute with neighboring Ukraine over natural gas supplies, saying that the former Soviet republic can afford to pay the market price for Russian gas. Cabinet officials reported to Putin that Russia and Ukraine had failed to strike a deal on Russian natural gas supplies to Ukraine next year.

"Difficult work is under way and no solution has been found yet," Industry Minister Viktor Khristenko said.

Putin said that Ukraine`s economy had seen fast growth this year, and added that the Ukrainian government had gotten substantial privatization revenues and Western loans.

"They (the loans) total billions of dollars, and this is quite sufficient for buying the necessary amount of gas from Russia at the market price," Putin said during a meeting with Cabinet officials at his country residence in Novo-Ogaryovo, just outside Moscow.

Ukraine has rejected Moscow`s attempts to more than triple the price of gas from the current $50 per 1,000 cubic meters to $160 per 1,000 cubic meters. The dispute could jeopardize supplies of Russian gas to the European Union, which gets almost half of its gas imports from Russia, with most being piped through Ukraine.

Prime Minister Mikhail Fradkov, who returned from a trip to Brussels, Belgium, told Putin that the EU was following the issue "very attentively, with great interest."

European Energy Commissioner Andris Piebalgs said Thursday he doesn`t expect the gas row between Russia and Ukraine to affect gas supplies to the EU.

There will be "no difficulty with gas transit from Russia to the European Union ... I don`t know of any case (in the past) where Ukraine hasn`t fulfilled its obligations," Piebalgs told journalists after a meeting with Ukraine`s Energy Minister Ivan Plachkov, according to Dow Jones Newswires.

Plachkov said a deal with Russia could be negotiated in the next several days, the Interfax news agency reported.

Expectations of a resolution to the dispute had risen Wednesday after the Kremlin said that Putin had discussed the issue with his Ukrainian counterpart Viktor Yushchenko.

Putin added a softer note to his harsh statement Thursday, saying that the dispute "must not hurt the development of intergovernmental links between Russia and Ukraine."

Relations between the two former Soviet neighbors soured after Western-leaning Yushchenko won a hotly disputed election last December against a Kremlin-backed rival.

Moscow also has demanded that other Western-oriented former Soviet nations of Georgia and Moldova pay higher gas rates. On the other hand, Belarus, whose autocratic President Alexander Lukashenko is on good terms with Moscow, also enjoys subsidized gas rates, but these are not being renegotiated.

Belarus` Prime Minister Sergei Sidorsky said Thursday that his nation next year will be getting Russian gas at the price of $47 per 1,000 cubic meters.