Prime ministers agree deal to end gas dispute

Russian state news agency RIA-Novosti reports that the prime ministers of Russia and Ukraine reached a deal to settle the gas dispute that has shut off supplies to Europe.

Under the deal, Ukraine will pay 20% less than the European price for this year.

This means a substantial increase for Ukraine in the first quarter but the price could fall significantly later in the year as gas prices are expected to drop.

The deal was announced early today by Russian Prime Minister Vladimir Putin.

Ukraine’s Prime Minister Yulia Tymoshenko said all gas supplies will begin flowing once the contract is signed by the two countries’ gas companies.