MOSCOW, Oct. 23 ā Russian Prime Minister Mikhail Fradkov will probably skip discussions on natural gas when he visits Ukraine for trade talks on Tuesday, a newswire reported Monday citing a source at the Russian government.
This would be a setback for Prime Minister Viktor Yanukovych, who has been seeking to finally agree on natural gas prices that Ukraine will have to pay starting in January.
āWe do not plan to hold natural gas talks,ā the source told Interfax late Monday. āThis matter is handled on a corporate level and they have an understanding of how to solve this problem.ā
The development delays indefinitely resolution of the most difficult problem in relations between Ukraine and Russia, putting Ukrainian steel and chemical companies, the key consumers of natural gas, under a major pressure.
The Ukrainian government hopes to keep gas prices between $130 and $135 per 1,000 cu m in 2007, while Russia has been suggesting the prices could increase to more than $200/1,000 cu m.
Any price hike to more than $135/1,000 cu m would strain Ukraineās chemical sector by making unprofitable most of the mineral fertilizer producers that are using natural gas as a raw material.
Fradkov is due to visit Kiev for trade and cooperation talks to pave the way for a meeting between President Viktor Yushchenko and Russian President Vladimir Putin later this year.
Parliament Speaker Oleksandr Moroz, who visited Moscow and met Putin two weeks ago, had said the issue of gas prices was supposed to be finally settled during the Fradkov visit.
Russiaās reluctance to sign an agreement on 2007 natural gas prices is a further indication that Moscow has been seeking political concessions from Ukraine before striking the deal.
A person familiar with the Russian-Ukrainian talks told Kommersant daily recently that Moscow has been demanding Ukraine to completely scrap its accession to NATO and to postpone accession to the World Trade Organization among other conditions to buy gas at $130/1,000 cu m in the first half of 2007.
Ukrainian Deputy Prime Minister for the Energy Complex Andriy Kliuyev on Monday denied the reports, but added the government had been ready āa constructive workā to reach the gas deal.
Meanwhile, Fradkov will also try to clarify Ukraineās position as far as the accession to the World Trade Organization is concerned, the source said.
Fradkov will also try to encourage Ukraine to speed up integration with the Common Economic Space, a Russia-led trade bloc that also includes Belarus and Kazakhstan, the source said.
The Yanukovych government recently postponed debates on bills that are required for Ukraine to join the WTO before the end of the year.
Yushchenko urged the government and lawmakers to approve the bills within the next two weeks to make sure that Ukraine joins the WTO on Dec. 21. (nr/ez)