Putin offers Ukraine reprieve in gas row

Vladimir Putin. Picture / Reuters

MOSCOW - Russian President Vladimir Putin has told gas monopoly Gazprom to supply Ukraine with gas at 2005 prices for the first three months of next year if Kiev signed a new contract for market prices from April.

Russia had threatened to cut off supplies of gas to Ukraine from January 1 after a bitter price dispute, which could threaten fuel supplies to Europe.

"Above all Ukraine is a brother nation and we must think about the whole relationship between Russia and Ukraine," Putin told a meeting of the Security Council to which the head of Gazprom, Alexei Miller, was invited.

"That is why I am charging the government and Gazprom with supplying Ukraine with gas for the first quarter of 2006 at 2005 terms and prices on the condition that our Ukrainian partners sign a contract before the end of the day Gazprom's proposals about a transition to market prices from the second quarter."

Putin's latest proposal was broadcast on NTV television.

Tense negotiations with Ukraine, led by pro-Western liberals since last year's "Orange Revolution", centred around Gazprom's demands that Kiev agree to a four-fold increase in prices for its gas.

The Russian gas giant wants US$230 (US$341) per 1000 cubic metres against the current US$50.

- REUTERS