January 11, 2006	Wednesday	Zilhaj 10, 1426

KIEV, Jan 10: Ukrainian Prime Minister Yury Yekhanurov defended his government’s recent deal with Russia on gas prices, telling an angry parliament that it served Ukraine’s national interests and promising that it would not lead to higher prices for consumers anytime soon.

“In its actions, the government was guided and will continue to be guided by the national interests of Ukraine,” Yekhanurov said in a speech before parliament.

He said that under the controversial January 4 deal Ukraine would pay a “far lower” price for gas than that paid by other eastern European countries and added that the accord “makes any sudden increase in the price of gas impossible” without the approval of the Ukrainian government.

Under the terms of the accord reached last Wednesday, Ukraine agreed to buy natural gas from both Russia and Turkmenistan through an intermediary company at a rate of $95 per 1,000 cubic metres.

That is nearly double the $50 Ukraine paid for Russian gas until January 1, but with the cheap gas from Turkmenistan it is still less than the price tag of $230 the Russian state-run gas giant Gazprom has insisted on for its own gas.

Gazprom had justified the increase by saying it was in line with “international market rates” elsewhere in Europe, which average $240 per 1,000 cubic metres. Many observers, however, saw the sudden increase as politically driven.

Specifically, many saw it as a Kremlin-inspired effort to undermine Ukrainian President Viktor Yushchenko and his government ahead of parliamentary elections in March by forcing them to pass the substantial natural gas price increase along to businesses and average consumers.

Yekhanurov, however, said this would not happen despite the agreed price increase. “Gas prices for the population will remain at their current level” for the time being, he said. —AFP