Ukraine claims win in gas dispute

UKRAINE’S prime minister Yulia Tymoshenko yesterday proclaimed her country the winner in the latest natural gas dispute with Russia, even though higher gas prices are going to badly hurt the Ukrainian economy.

Tymoshenko told a Cabinet session that Ukraine has won “great conditions” under a gas deal that ended Russia’s two-week natural gas cutoff to European countries.

Monday’s deal doubled the price Ukraine has to pay for Russian gas in the first quarter of 2009. Gas prices are expected to fall later this year, but Ukraine is still expected to pay significantly more this year for Russian gas than it did in 2008.

As part of the deal, the fee Russia pays Ukraine for delivering gas via its pipelines remains unchanged in 2009.

The agreement was hailed by the European Union, but ran into criticism at home.

Ukraine was struggling to pay for Russian gas even at last year’s lower price as it faced a currency collapse, falling exports and a shaken banking sector.

Tymoshenko’s political rival, President Viktor Yushchenko, has assailed the deal, saying the price was too high and will cripple the country’s key metals and chemical industries. Yushchenko’s office said, however, that Ukraine is not seeking to reconsider the deal.