Moscow and Kiev have reached an agreement to resolve their gas dispute. After marathon talks in Moscow, the chief executive of Russian state monopolyGazprom, Alexei Miller, and his Ukrainian counterpart from Naftogas, Olexi Ivchenko, announced the accord.
Gazprom’s demands for a more than four-fold price increase to $230 per thousand cubic metres were met. However, Ukraine will not actually pay that, as Russian gas will be mixed with cheaper supplies from central Asia. That gives Kiev a price of $95.
The two sides also agreed to increase the transit fees Russia pays to Ukraine, up to $1.60 for every hundred kilometres. The agreement is valid for five years. It ends a row that culminated in Gazprom cutting supplies to Ukraine on Sunday after Kiev rejected the price hike.
Both sides have put a positive spin on the deal. Ukrainian Prime Minister Yuri Yekhanourov said Kiev was moving towards energy independence. However, Moscow retains considerable influence over its neighbour’s supplies, as the shareholders of the company in charge of delivering Russian and central Asian gas are subsidiaries of Gazprom. There are no Ukrainian owners.
Russian President Vladimir Putin congratulated the two parties on resolving a complex issue, and said the decision would have a positive impact on bilateral relations in general.