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Gas dispute over. Or is it?

Energy experts have warned the gas dispute may not be over, despite Premiers Putin and Timoshenko agreeing a supply and transit price at the weekend. Even if the Ukrainian agrees to terms, there are doubts it can pay.

The heads of Gazprom and Naftogaz work out the fine print to supply Russian gas to Ukraine, and on to Europe. But if Kiev was unable to pay last year's $179, it's hard to see how in 2009 it can find almost double that according to Chris Weafer, Chief Strategist at Uralsib.

“Ukraine is talking with the IMF on a loan of about $15 Billion, and without that money Ukraine's economy is technically bust. Ukraine could hardly afford the price it was paying for gas last year, the heavily discounted price. They certainly can't afford to pay anything close to European market prices.”

The fact Ukraine's prepared to cut off Europe's blue fuel and destroy its reputation, shows just how desperate it is according to Vitaly Ermakov from Cambridge Energy Research associates.

“The calculation on the Ukrainian side was to play a waiting game. Because they were fully aware that the gas prices are going to decline in Europe, on the back of falling oil prices. Ukraine's calculation was to survive through the winter and then negotiate a better deal. But this did not work, this did not work as intended, and it essentially resulted in huge disruption of supply, and this crisis. It tells volumes about how desperate how Ukraine is in terms of its finances. It just doesn't have any money.”

Add President Yuschenko's history of questioning the authority of Naftogaz and Timoshenko after they've done deals with Gazprom in the past – and experts warn Kiev's Cold War could once again spread to Europe.

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