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. Last Updated: 07/27/2016

Ukraine Turns Screws on Russian Oil Firms

Ukraine's government stepped up pressure on Russian oil firms Thursday, saying it would guarantee their property rights for the country's biggest refineries only if they agreed to cut retail fuel prices.

The new administration, which rose to power on the back of street protests, is battling rising inflation and set limits on fuel prices after they climbed by over 10 percent last week. It also banned exports of domestically produced crude oil and curbed exports of refined oil products.

Russian oil companies TNK-BP, LUKoil and Alliance group have been unwilling to cut prices, saying higher world crude prices were behind the rises.

"We are prepared to offer the Russians a package of proposals, and not only about price formation for oil products but also, for example, guaranteeing Russian investors' rights in the oil and gas sector of Ukraine," Economy Minister Serhiy Teryokhin said in a statement.

Ukrainian Prime Minister Yulia Tymoshenko said Thursday that the government had already reached a deal with TNK-BP. The firm, which controls leading refinery Lysychansk, and said the deal was short-term.

"We agreed that tomorrow from eight in the morning, TNK's petrol station network, which comprises a thousand stations, will move to prices set by the Economy Ministry," Interfax-Ukraine quoted Tymoshenko as saying.

Oleksander Horodetsky, head of TNK-BP in Ukraine, said the company would freeze prices only at their own 51 service stations and only until May 1.

Tymoshenko previously accused refineries of unjustified price increases. Ukraine's Anti-Monopoly Committee launched a probe into "anti-competitive coordinated actions" by the plants.

The prime minister plans to meet officials from LUKoil, which controls Ukraine's Odessa refinery, on Friday.

Kremenchug's oil refinery, controlled by state oil and gas company Naftogaz Ukrainy and Tatneft, said it would comply with all government demands.