Ukraine, Russia agree on gas prices

MOSCOW — Russia and Ukraine reached a deal today to resume gas shipments to Ukraine under a complex price scheme.

Details of the agreement were not announced. But the BBC, on its Web site, reported that Russian gas apparently will be mixed with cheaper supplies from Central Asia and Ukraine will buy gas for $95 for 1,000 cubic meters.

Today's announcement ended a standoff that raised fears of shortages across Europe.

Russia stopped selling natural gas to the Ukraine on Sunday after the neighboring country refused to accept a rise in price from $50 to $230 for 1,000 cubic meters.

Before today's announcement, disgruntled Ukrainians thronged Bessarabsky Market in downtown Kiev in freezing temperatures Tuesday to buy electric heaters after a natural-gas cutoff by Russia brought on by a pricing dispute.

The halt of Russian gas supplies that began Sunday had not caused major heating problems, but Kiev residents had feared the two sides were far from a resolution.

Residents of the capital largely blamed Russia, which had asked Ukraine to pay four times more for gas than it did last year.

"It's Russia's revamped imperialism behind all this. They believe that with the cutoff of gas they can dominate us," said Valentyn Vasilyev, 32, who was among those buying a heater.

"Thanks to Russia I am now wasting handsome money on an electric heater. But Muscovites will not win this time," said 46-year-old Olena Kostenko, wiping her nose as it started to snow.

For the vendor doing a brisk trade at the open-air stand, the gas dispute has been good news. He sold 10 heaters in less than an hour, for $21 each.

"I regret I didn't have more of these," said Yuriy, who gave only his first name because he feared legal problems for selling unlicensed goods.

The cutoff also reduced gas supplies to Europe, which gets about a quarter of its gas from Ukraine, though the European countries most affected — Hungary, Austria, Slovakia and Slovenia — reported supplies were back to normal Tuesday.

State Department spokesman Sean McCormack criticized Russia for "the use of energy for political purposes."

Noting that Europe was in the midst of winter's cold, McCormack said the decision by Russia to restore most of the gas it had withheld Monday to European countries "does not resolve the issue."

The gas dispute highlights Ukraine's dependence on Russia as the key supplier to its energy-inefficient industries. It also demonstrates Russia's opposition to Ukraine's attempts to break out of the Kremlin's sphere of influence and join the European Union and NATO. Ukraine's tilt toward the West since President Viktor Yushchenko took office a year ago has irritated the Kremlin.

Ukraine's Foreign Ministry has characterized the gas dispute as an attempt by Russia to wreck Ukraine's economy as the country tries to integrate into Western Europe.

Some Ukrainians, however, mainly pensioners with strong ties to the former Soviet Union, still believe the country's future lies in the renewal of links with Russia.

"What are we without Russia? A wasteland, nothing. You argue with a bear and it will ultimately eat you," retired army officer Mykola Kostenyk said.