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Russian President Vladimir Putin said Ukraine can afford buying Russian gas at market prices
Russian President Vladimir Putin said Ukraine can afford buying Russian gas at market prices, underscoring the stance taken by Moscow in the "gas conflict" with Kiev. The gas talks with Ukraine should not affect the development of interstate relations between the two countries. This situation should not put "our Ukrainian colleagues in a difficult situation, but we should be realistic. The growth rate of the Ukrainian economy is comparable to Russia’s, Kiev received considerable sums from privatization, and loans for its energy sector from western loan institutions; it's billions of dollars. It's sufficient to purchase the necessary volume of gas at market prices in Russia," Putin said at a meeting with the ministers of the economic bloc on Thursday. Ukraine produces 18 billion cubic meters of gas. "It fully meets ordinary consumers' demand, so it has nothing to do with Russian gas supplies. The Ukrainian government can set any price for this gas. It is their sovereign right, he went on to say. Industrial consumers and branches of the economy should know to what extent they are subsidized; support and subsidizing are transparent in a normal economy, effected through budget process, Putin said. It is universal practice. The society should now how much Ukraine receives and why. "Russians and Ukrainians, the public should know the essence of the events happening in this sphere. "The transfer to settlements for the Russian gas supplied to Ukraine at market prices and for the gas transit to Europe began not yesterday or the day before yesterday but in March of this year," he underlined. The Ukrainian partners not only supported this process in a most energetic way; they were its initiators, the Russian president said. Gazprom's losses in the "gas conflict" between Russia and Ukraine may total 4.6 billion dollars. Europe will be paying 255 dollars per 1,000 cubic meters of Russian gas in the first quarter of 2006, according to Putin. At present, Ukraine pays 50 dollars per 1,000 cubic meters of gas, so the difference, given its proximity to Russia, makes 180 dollars. In the beginning of this year, Russia and Ukraine transferred to tax settlements for gas, gas condensate and oil in the country of destination. Given the current gas price, direct pumping of money from Russia to the Ukrainian budget is worth some one billion dollars. "It's direct because we don’t get anything from Ukraine in exchange. In effect, it's support of our Ukrainian friends," Putin said. He underlined that Gazprom's possible losses from the difference in prices may reach 3.6 billion dollars. Plus another billion dollars pumped into the Ukrainian budget, which brings Gazprom's estimated losses to 4.6 billion, Putin said. "It's a burden on the Russian economy which is difficult to explain," Putin underscored. Ukrainian gas consumers pay less than their Russian counterparts, he noted. Twenty-five million Russians live below the poverty line. "We should find an acceptable solution for our partners and the Russian economy. The government should provide assistance and support to the officials in the power generation sector involved in the gas talks, while taking into account what I have said," Putin said.
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