MOSCOW, December 31 (RIA Novosti) -- Russian President Vladimir Putin on Saturday instructed the government and natural gas giant Gazprom to provide gas supplies to Ukraine in the first quarter of next year in the 2005 prices if the country agrees to sign a contract for transition to market prices starting in the second quarter of 2006.
"I instruct the government and Gazprom to provide gas supplies to Ukraine in the first quarter of 2006 on the same terms and at the same prices as in 2005, if Ukrainian partners sign a contract based on Gazprom's proposal to transfer to market prices in the second quarter, before January 1," Putin said Saturday at a conference with Security Council officials, attended by Gazprom CEO Alexei Miller.
"If no clear response follows, we will conclude that our proposal has been rejected," Putin added.
The president's initiative came as an attempt to break the deadlock in the labored nine-months' negotiations between Russia and Ukraine over the terms of natural gas supplies to Ukraine and Russian gas transit via its territory to Europe.
During the conference, Prime Minister Mikhail Fradkov and Miller briefed the president about the situation at the talks.
"I can see that the position of the government and Gazprom is quite tough," the head of state said.
Putin, however, added that Ukraine "is not some abstract boss or oil and gas barons who will see to their interests anyway."
"They are a fraternal nation to us, and we should think about our relations in a complex whole," Putin said.
Earlier, Ukrainian President Viktor Yushchenko requested a transitional period before his country starts paying market gas prices in full.
Gazprom spokesman Sergei Kupriyanov said Saturday the company was fully prepared to sign a gas deal with Ukraine before the end of Saturday.
"We are all at work, all the services are prepared for signing all the necessary agreements in the eight hours remaining before the end of the day and the year," Kupriyanov told the NTV television channel.
According to Kupriyanov, the Ukrainian delegation is not in Moscow now, but "a plane is at the ready" if Ukraine decides to go for the deal. "We are ready to exchange documents in any other way - by fax, for example. The ball is now in Ukraine's court," Kupriyanov added.
The bilateral gas talks have stalled over Ukraine's refusal to transfer to the market gas price of $160 per 1,000 cu m. So far, Ukraine has been paying about $50 per 1,000 cubic meters of Russian gas under a barter agreement.
In reply to Gazprom's move, Ukraine has insisted on higher fees for Russian gas transit via its territory.
After attempts to reach an agreement failed, Gazprom Deputy Chairman Alexander Medvedev said the price for Ukraine would be raised to $220-$230.
Yushchenko reacted in televised comments Friday, saying the price of $230 per 1,000 cu m was unreasonable and offered to pay $80, with Ukraine's transit fee totaling $1.75-$1.80 per 1,000 cu m per 100 km (62.5 miles).
In another bid to secure an agreement, Gazprom said it would cut off gas supplies to Ukraine starting January 1 if the two countries failed to settle their dispute over natural gas, Russia's main export commodity. However, both sides assured European consumers that Russian gas flows to Europe via Ukraine would not be disrupted.
