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Ukraine able to withstand gas prices of $400 – prime minister

According to Ukrainian media, the two countries are negotiating a gas price of 210-230 U.S. dollars

KIEV, December 15 (Itar-Tass) —— Ukraine’s economy is capable of withstanding the gas price of up to 400 U.S. dollars per a thousand cubic meters, Ukrainian Prime Minister Nikolai Azarov said on Thursday.

“Don’t worry, we shall survive, and will ring the New Year in a positive mood,” he told journalists. “We are stable enough, and we have firm positions in our talks with Russia. So, I said that the 2012 budget has the gas price of 416 U.S. dollars for a thousand cubic meters. Well, we shall pay it. We have inherited this price from the previous government. Sooner or later we will have a normal price, I am sure of that.”

Ukraine’s First Deputy Prime Minister Andrei Klyuyev said on Wednesday that the government planned to submit the country’s 2012 budget based on a gas price of 416 U.S. dollars to the national parliament for second reading.

“The 2012 budget fixes the gas price at 416 U.S. dollars per 1,000 cubic meters. On Monday, December 19, the draft budget will be considered by the cabinet of ministers in second reading and then submitted to the Verkhovna Rada [national parliament],” he then said.

At the same time, Klyuyev noted that the negotiating process with Russia is not yet over. “And we are committed to further talks with our Russian colleagues and partners. If we succeed, it will be good. If not, well, we shall manage to go through. I don’t see any tragedy in it. If we finally manage to revise the gas price, it will be a nice surprise for the budget,” he said.

Earlier, he was reported as saying that the price for the Russian gas pumped to Ukraine might reach 456 U.S. dollars in the first quarter of 2012, if the parties fail to come to a compromise. In the fourth quarter of 2011, Russia sold its gas to Ukraine at a price of about 400 U.S. dollars for a thousand cubic meters.

According to Ukrainian media, the two countries are negotiating a gas price of 210-230 U.S. dollars.

In November, Ukrainian President Viktor Yanukovich said agreements with Russia on new gas prices could be reached in December. Still earlier, Prime Minister Nikolai Azarov said Ukraine had agreed with Russia to set up a three-sided gas transportation consortium with the participation of the European Union and to revise the 2009 gas contracts. According to the prime minister, if gas prices are reduced, his country will be able to save 500 million U.S. dollars a month, or six billion U.S. dollars a year.

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