The two countries endured a bitter price dispute in early 2006 over Russian energy giant Gazprom's demand that Ukraine, which had long enjoyed subsidized rates, pay the market price for natural gas. A compromise was eventually reached, ending a three-day Russian boycott on deliveries.
"The schemes will be market-based," Viktor Yanukovych told the press, "the pricing mechanism will be transparent, and it will correspond to the level of economic relations between Russia and Ukraine."
Following talks with his Russian counterpart, Mikhail Fradkov, Yanukovych said Ukraine would fill its underground storage facilities by winter, eventually pumping a total of 24.5 billion cubic meters of natural gas into them.
Fradkov said Russia was to trying to peg gas prices to agreements reached at the beginning of the year.
"As regards prices, we will proceed on the basis of agreements reached at the beginning of the year [with Ukraine]," he said, adding that the topic dominated the agenda Wednesday.
Currently, Ukraine is receiving a combination of Russian and cheaper Turkmen gas for $95 per 1,000 cubic meters as part of the January 2006 compromise. The pricing formula was based on a rate of $230 for Russian gas and $60 for the Central Asian republic's gas, but the agreement was only valid during the first half of 2006.
Fradkov said detailed talks would follow soon.
Gazprom, Russia's largest energy company, is seeking to raise the rates paid by Ukraine and other former Soviet republics to European levels, which was the reason behind the New Year dispute. At the time, the gas monopoly suspended its supplies, prompting Ukraine to call the move blackmail, while Russia in turn accused its neighbor of tapping gas intended for European markets.
