Russia agrees on $100 natural gas price discount for Ukraine
Ukraine will receive a discount of $100 per 1,000 cu m at the natural gas price of $330 and a 30% discount on other prices, Russian President Dmitry Medvedev said on Wednesday.
Medvedev's announcement came after a meeting with his Ukrainian counterpart Viktor Yanukovych in Kharkov in eastern Ukraine.
"Discounts for Ukraine will come into effect from April this year," Yanukovych said.
The discount will apply to 30 billion cubic meters of Russian natural gas to be supplied to Ukraine in 2010 and 40 billion cubic meters in subsequent years.
The amendments to the gas deal between Russia and Ukraine also cancel provisions on penalties, which had never been applied.
Yanukovych, who was inaugurated in February, vowed during his campaign to improve relations with Russia and renegotiate the January 2009 deal on gas supplies, which increased the price Ukraine paid for Russian gas, straining the country's troubled finances.
Ukraine requested Russia lower the gas price to $250 or at least $260 per 1,000 cu m, Russian business papers reported on Monday.
The ex-Soviet republic currently purchases Russian natural gas at the average annual price of $337 per 1,000 cu m.
The gas price equaled $305 per 1,000 cu m in the first quarter, and increased to $330 per 1,000 cu m in the second quarter of this year.
The deal seems to be advantageous for both parties as Ukraine has agreed in exchange to extend the term of the Russian Black Sea Fleet presence in the country's Crimea for 25 more years.
The new agreement on the Russian Black Sea Fleet signed after talks between Medvedev and Yanukovych also stipulates the extension for an additional five years after the term expires.