Ukraine and Russia resumed tense talks yesterday amid Russian threats to cut off natural gas exports to its energy-dependent neighbor within 72 hours unless Kiev agrees to pay four times as much.
The dispute has brought to a boiling point the tensions that have strained relations between Moscow and its former imperial satellite since reformist President Viktor Yushchenko came to power in Ukraine after last year's Orange Revolution, promising to move his nation of 48 million toward integration with the West.
Russia's state-controlled gas monopoly Gazprom has threatened to turn the taps off at 10am on Sunday if Ukraine refuses to sign a new contract at a price of US$220-230 per 1,000m3.
That is more than four times the current tariff of US$50. Ukrainian Prime Minister Yuriy Yekhanurov on Wednesday denounced the Russian demand as unacceptable pressure. Ukraine relies on Russia for nearly a third of its gas needs.
Ukrainian Energy Minister Ivan Plachkov flew into Moscow on Wednesday for talks with his Russian counterpart Viktor Khristenko but the two officials left the negotiations late in the evening without a deal.
Officials from OAO Gazprom and the Ukrainian state energy firm Naftogaz met on Wednesday morning and the two ministers were due to resume their talks later in the day.
Gazprom argues that it has every right to demand the increase as a justifiable move to scrap energy subsidies enjoyed by former Soviet nations and move the price it charges Ukraine more into line with world levels.
Ukraine, which fears such a sharp rise in energy costs could cripple its energy-intensive heavy industry and impede efforts to boost its economy, has asked for the increases to be phased in over five years instead of all at once.
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