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. Last Updated: 07/27/2016

Fradkov Fails to End Quarrel Over Gas

ReutersFradkov, right, met with Yekhanurov on Monday to try putting an end to a long-standing dispute over gas prices.
Russia and Ukraine failed to reach a compromise on Monday in their bitter dispute over gas supplies, Russian news agencies reported.

The two neighbors are at loggerheads after Ukraine rejected demands by Russian gas monopoly Gazprom to abandon a system of preferences and switch to international gas prices starting in 2006.

Prime Minister Mikhail Fradkov and his Ukrainian counterpart, Yuriy Yekhanurov, met behind closed doors in Moscow to try to negotiate a deal after Ukraine said Kiev was not opposed to switching to international prices but required a transitional period.

But Russian agencies, quoting a source in the Russian delegation, said there were no breakthroughs.

"The two sides have reiterated their positions and Ukraine showed more understanding of the need to switch to market prices both for transit and supplies," the agencies quoted the source as saying. "But so far the Ukrainian side has not realized this should be done at once."

Gazprom initially said it wanted $160 per 1,000 cubic meters, compared with the current $50. But later, enraged by Kiev's reluctance to surrender, it raised the price to $220 or $230.

The source, quoted by agencies, said that talks would continue between Gazprom and Ukrainian company Naftogaz Ukrainy. Gazprom has rejected the idea of the transitional period proposed by Ukrainian President Viktor Yushchenko but has agreed to pay international transit tariffs for gas pumped through Ukraine to Europe.