Ukraine contests gas price rise

UKRAINE: Ukraine's new prime minister flew to Russia yesterday to try to persuade his powerful neighbour not to go ahead with…

UKRAINE: Ukraine's new prime minister flew to Russia yesterday to try to persuade his powerful neighbour not to go ahead with a threatened hike in gas prices that could strangle the Ukrainian economy.

Pro-Moscow prime minister Viktor Yanukovich, humiliated in Ukraine's 2004 "Orange Revolution", returned to power two weeks ago, promising to restore economic growth but his success could hinge on a favourable gas deal with Russia. In January, Russian gas giant Gazprom hiked gas from $50 (€39) to $95 per 1,000 cubic metres. A row at the time briefly disrupted supplies of Russian gas to Europe via Ukraine.

A gas price above $120 would hurt the competitiveness of the energy-hungry heavy industry that drives Ukraine's economy, say analysts.