Ukraine seeks own oil profit

Russian President Vladimir Putin expressed confidence Ukraine can afford buying Russian gas at market prices, underscoring the stance taken by Moscow in the "gas conflict" with Kiev.

The gas talks with Ukraine should not affect the development of interstate relations between the two countries. This situation should not put "our Ukrainian colleagues in a difficult situation, but we should be realistic. The growth rate of the Ukrainian economy is comparable to Russia’s, Kiev received considerable sums from privatization, and loans for its energy sector from western loan institutions; it's billions of dollars. It's sufficient to purchase the necessary volume of gas at market prices in Russia," Putin said at a meeting with the ministers of the economic bloc on Thursday.

Ukraine produces 18 billion cubic meters of gas. "It fully meets ordinary consumers' demand, so it has nothing to do with Russian gas supplies. The Ukrainian government can set any price for this gas. It is their sovereign right, the president went on.

Industrial consumers and branches of the economy should know to what extent they are subsidized; support and subsidizing are transparent in a normal economy, effected through budget process, Putin added.

"The transfer to settlements for the Russian gas supplied to Ukraine at market prices and for the gas transit to Europe began not yesterday or the day before yesterday but in March of this year," he underlined.

The Ukrainian partners not only supported this process in a most energetic way; they were its initiators, the Russian president said.

In the beginning of this year, Russia and Ukraine transferred to tax settlements for gas, gas condensate and oil in the country of destination.

Given the current gas price, direct pumping of money from Russia to the Ukrainian budget is worth some one billion dollars. "It's direct because we don’t get anything from Ukraine in exchange. In effect, it's support of our Ukrainian friends," Putin said.

He underlined that Gazprom's possible losses from the difference in prices may reach 3.6 billion dollars. Plus another billion dollars pumped into the Ukrainian budget, which brings Gazprom's estimated losses to 4.6 billion.

"It's a burden on the Russian economy which is difficult to explain," Itar-Tass quoted Putin as saying.

V.Y.