MOSCOW/KIEV (Reuters) - Russia said on Sunday it would cut off gas supplies to Ukraine within hours over a price row that strikes at the heart of relations between the two ex- Soviet states and could affect deliveries to western Europe.

"The new contract contained everything suggested by Putin -- supplying gas to Ukraine in the first quarter at old prices and switching to European prices from the second quarter. Ukraine has turned our proposal down. It means the plan to cut supplies from...10 o'clock (0700 GMT) is still in force."

West European states, drawing 80 percent of their Russian deliveries from the same pipeline crossing Ukraine, have expressed concern.

Moscow seeks a rise in prices to $230 per 1,000 cubic metres from the current $50 -- a level that reflects Soviet-era subsidised rates. Ukraine agrees in principle but wants a transitional period and suggests the Kremlin approach mirrors disapproval of Kiev's pro-Western government...

"A Happy New year, and oh, no more gas for you guys..!"

[ 31 December 2005: Message edited by: Clog-boy ]

MOSCOW (Reuters) - Russia cut gas supplies to Ukraine on Sunday in a dispute that appeared to hit deliveries to a wintry Europe just as Moscow takes over as chairman of the Group of Eight hoping to showcase its reliability as an energy source.

The switch-off already seemed to be making itself felt further west, with deliveries down in Hungary and Poland.

Ukraine's Naftogaz energy company accused Russia of brinkmanship that was jeopardizing Europe's supplies. European gas demand is near peak levels because of freezing weather.

Though Russia says it is purely a business dispute, the row has fed concern that the Kremlin is prepared to use its vast energy resources as a political weapon.

Ukraine's Western-leaning president, Viktor Yushchenko, has irked Moscow by trying to take his ex-Soviet state on Russia's western border into NATO and the European Union.

Ukrainian officials say that is why the Kremlin is punishing Ukraine with such a huge price increase while letting more Moscow-friendly ex-Soviet states such as Belarus pay far less.

[ 01 January 2006: Message edited by: Clog-boy ]

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MOSCOW, Jan. 4 (UPI) -- Russia and Ukraine signed a five-year contract Wednesday on the delivery of Russian natural gas to Ukraine at a price of $230 for 1,000 cubic meters.

The deal ended three days of acrimony over pricing that caused Russia to cut off its supply to Ukraine, in turn causing shortages in Western Europe, CNN said.

Ukraine's new rate of $230 compares to $47 for Russian ally Belarus, and $110 for Latvia, Lithuania and Estonia, which are all members of the European Union.

The news came from Russia's Gazprom Chief Executive Officer Alexei Miller after negotiations in Moscow with Naftogaz Ukrainy's chief, Olexiy Ivchenko, the Interfax news agency said.

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Ukraine's new rate of $230 compares to $47 for Russian ally Belarus, and $110 for Latvia, Lithuania and Estonia, which are all members of the European Union.

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I think if Ukrainian's want to point to economic sabotage, they might want to examine the record of privatization and IMF policies in that country over the last nine or ten years. Economic saboteurs have done a number on that country ever since declaring independence. Up to 1980, Ukraine probably owned the most highly educated workforce in Eurasia. They've lost women to Russia and W.Europe for prostitution, and criminals have taken over certain areas of the economy and drug trafficking, similar to Albania. Ukraine now has one of the highest HIV infection rates of Eastern nations with poverty a growing problem.

$230 per 1000m3 USDN is still a good deal for Ukraine by comparison regardless of what the newly privatized distribution companies decide to gouge them for in Kiev, Minsk etc. Keep in mind that we're being gouged for what is supposed to be our own stuff - the Uke's are dealing with Russia.

[ 05 January 2006: Message edited by: Fidel ]