Gas Transit Fee Called Too Low

KIEV -- Ukrainian Prime Minister Yulia Tymoshenko suggested on Wednesday that the price Russia pays to transit gas through Ukrainian territory to Europe was too low and called for talks with Moscow.

Her comments pit her against President Viktor Yushchenko, who said over the weekend that it would not make sense to raise transit fees, because they would automatically lead to an even higher gas import price for Ukraine's domestic use.

"As gas prices have almost tripled and the cost of transit has not risen, I think the time has come to have discussions between Ukraine and Russia about the transit cost of gas through Ukraine to Europe," Tymoshenko told reporters after a Cabinet meeting.

Ukraine now pays almost $180 per 1,000 cubic meters of gas, a steep rise from the $50 per 1,000 cubic meters it paid in 2005. But it has charged Russia more for transit -- $1.70 per 1,000 cubic meters for 100 kilometers now, compared with $1.09 in 2005.

"Talk of an increase in fees encourages Russia to build ways of bypassing Ukraine," a former energy official said.

He said the South Stream pipeline under the Black Sea, which would carry gas to Europe through Bulgaria, was one such example and could divert some 30 billion cubic meters of gas away from Ukraine. President Vladimir Putin secured Bulgaria's participation in the 10 billion euro ($14.5 billion) project last week.