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Russia, Ukraine Trade Accusations in Gas Dispute
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http://enews.voanews.com/t?ctl=1069E4D:3919ACA Ukraine denies
charge, says gas supplies either imported from Turkmenistan or come
from Ukraine's underground reserves





Russia's natural gas monopoly Gazprom headquarters with a flag showing
the company's logo on the foreground seen in Moscow, Sunday, Jan. 1,
2006Russia says neighboring Ukraine is stealing gas that is supposed
to go on to western Europe, a charge officials in Kiev deny. The
accusations come amid the bitter dispute between the two countries
over gas prices, which is now also affecting other countries in
Europe.

Russian officials say Ukraine is siphoning gas out of a pipeline that
passes through its territory carrying gas to western Europe. Ukrainian
officials deny this, but say they could take such a measure soon if
necessary.

The flow of gas has decreased since Sunday when Russia cut off
supplies to its neighbor in a dispute over prices. But the action is
also affecting countries including Poland, Hungary and Austria.

Officials in Hungary say supplies have gone down by 40 percent since
Sunday.

Russia wants to quadruple the price of gas sold to Ukraine, from the
current $50 to $230 per 1,000 cubic meters.

Ukraine responds that any increase should be phased in gradually and
accuses Moscow of applying political pressure. One year ago
pro-Western president Viktor Yushchenko took power in Ukraine, leading
to a strain in relations.

Roland Nash with Renaissance Capital in Moscow says there are both
political and economic issues involved.

"Clearly it is better for Gazprom to get paid more for its gas," he
said. "But it is more than coincidence that this takes place after a
more pro-European, anti-Russian regime is in place in Ukraine."

The gas dispute comes as Russia is taking over the G-8 group of
industrialized nations for 2006.

President Vladimir Putin says his primary goal for the year will be to
increase energy security, a logical step given Russia's position as
one of the world's major energy exporters. But the dispute with
Ukraine is raising concern that Moscow can use its vast gas and oil
reserves to apply a big stick when necessary.

Europe depends on Russia for up to half of its supply of natural gas,
along with a large amount of its oil.