"The proposed plan is a step toward Ukraine," Dmitry Medvedev said. "But this step fully accounts for the interests of Russian producers and the state."
Medvedev said it was not an easy decision and that Russia would have to raise considerable funds. "However, this is an absolutely transparent and market-oriented decision," he said.
Putin's proposal was the latest twist in the Russian-Ukrainian gas dispute. Ukraine, which heavily depends on Russian natural gas, has not yet agreed to a more than four-fold increase in gas prices, claiming the price hike is politically motivated. Russian gas monopoly Gazprom threatened to cut off deliveries beginning January 1 if a 2006 contract on gas deliveries to Ukraine and transit to Europe via Ukraine has not been signed.
