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Ukraine urges Gazprom to change gas price terms

Kiev, November 28, 2009

Ukraine has asked Russia's giant gas monopoly Gazprom to amend the formula by which it calculates the price of gas, Ukrainian state energy firm Naftogaz has said.

Naftogaz announced the proposal just days after Gazprom relaxed contract obligations for Ukraine, allowing it to buy far less gas next year as its crippled economy needs less energy, according to a report in our sister newspaper Gulf Daily News.

Rows between Kiev and Moscow over gas volumes, prices and debts have led to supply cuts to Europe, which gets a fifth of its gas from Russia via Ukraine.

'We think the formula that calculates the price of gas. could be subject to consultation and correction in order to optimise the price of gas for Ukraine,' Naftogaz chief Oleh Dubyna said in a statement.

'Until now, Naftogaz has not yet received an answer to its proposal from the side of Gazprom and is continuing the negotiating process,' he said.

Naftogaz gave no further details and did not say whether it was seeking lower prices. The price of gas for Ukraine tracks the prices of gas oil and fuel oil also used by power stations.

A bitter row over gas prices last year - which Russia had traditionally subsidised to its fellow former Soviet states - led to a three-week stand off in which supplies were cut leaving hundreds of thousands of Europeans out in the cold.

Moscow and Kiev signed a 10-year deal to end that dispute which said Naftogaz would pay the 'market price' for gas next year, calculated according to a formula. The deal - and the formula - was never made public.

Gazprom said earlier this week the average price for Ukraine next year could be about $280 per 1,000 cubic metres against over $228 this year.




Tags: Gazprom | Naftogaz | Ukrain | gas prices |

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