MOSCOW, November 25 (RIA Novosti) - Russia and Ukraine need to transition to world-level natural gas prices, Russian Prime Minister Mikhail Fradkov said Friday.
"We are currently planning to sign a relevant intergovernmental agreement and contracts between companies," Fradkov said, adding that this work should be completed in the near future as Russia needed contracts for 2006.
He said Russia's position on the issue was well-known: Russia wants transition to open and transparent market relations with reasonable calculation of natural gas prices.
Fradkov cancelled his visit to Ukraine on November 23 due to a dispute over natural gas prices.
For the past five years, Russia has been selling natural gas to Ukraine for $50 per 1,000 cu m against the reference price of $80. During this period, European gas prices nearly doubled.
Now the market net back price for Ukraine is estimated at $160 per 1,000 cu m. However, Ukraine has been insisting that Russian gas supplies and transit be continued on the same terms as in 2005, despite earlier top-level agreements to move to European prices and tariffs.
