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Ukraine reviews gas prices in new budget

  |   Dec. 5, 2012 at 6:57 AM
KIEV, Ukraine, Dec. 5 (UPI) -- The Ukrainian government said it based its preliminary budget for next year in part on lower prices for natural gas imported from Russia.

About 20 percent of Europe's gas imports come from Russian sources, though the majority of that heads through the Soviet-era natural gas transit system in Ukraine. About 60 percent of Ukrainian natural gas needs are met through Russian imports.

Alexander Yefremov, head of the ruling Party of Regions in parliament, said next year's budget was based on a gas price of $417 per 1,000 cubic meters, reports Russian news agency RIA Novosti.

Ukraine for the fourth quarter of 2012 is expected to pay around $432 per 1,000 cubic meters of gas.

Ukraine said recently it was cutting back on gas purchases from Russia despite a take-or-pay mechanism with Gazprom.

Ukraine is tied to a 2009 natural gas deal with Russia that ended an impasse over prices. Former Ukrainian Prime Minister Yulia Tymoshenko, who helped broker the deal, is serving a seven-year prison term after being convicted on charges she abused her authority during negotiations.

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