Ukraine fears energy crisis as gas prices bite
Thu Aug 17, 2006 8:46am ET
By Natalya Zinets
KIEV, Aug 17 (Reuters) - Ukraine may still face an energy crisis this winter, Deputy Prime Minister Andriy Klyuev said on Thursday, despite assurances from Russia that it will not sharply raise the price of gas supplies to its neighbour.
Klyuev, who oversees the energy sector, chaired a government meeting to discuss preparations for winter and avoid a repeat of a gas crisis that hit Ukraine and Europe in January when Russia cut supplies to Kiev due to a pricing row.
"We can clearly state that we have a gas deficit at about 8 billion cubic meters. We have difficulties with gas supplies, payments, with the financial situation at (state oil and gas firm) Naftogaz and other energy companies," Klyuev said.
Prime Minister Viktor Yanukovich, who favours closer ties with Russia and was appointed earlier this month after a fierce tag-of-war with pro-Western factions in parliament, won Moscow's word on Wednesday that there will be no big hikes in gas price just yet.
But Yanukovich has also said more talks on gas supplies for 2007 could be held in November or December.
At the start of the year Ukraine was forced to accept a nearly two-fold increase in prices for Russian gas as Gazprom (GAZP.MM: Quote, Profile, Research) cut supplies for several days in a move that affected many European customers. Ukraine is a key transit route for the Russian gas to Europe.
Kiev now pays $95 per 1,000 cubic metres of gas compared with $50 previously.
The new price is paid for a mix of Russian natural gas and much cheaper supplies from Turkmenistan. Continued...
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