Ukraine and Gazprom reach agreement on gas

Ukrainian Prime Minister Yulia Timoshenko says she has reached an agreement with Gazprom on gas prices.

After meeting with Gazprom’s CEO Aleksey Miller, Timoshenko said, at the opening of a government meeting on Wednesday, that the sides have compromised on pricing policy for next year, and a gradual transition to market rates.

Earlier Gazprom warned that the cost of gas for Ukraine may DOUBLE starting from 2009, to around $400 dollars per thousand cubic meters.

Gazprom's suppliers in Central Asia have already said they plan to increase the price at which they sell to Gazprom, to market levels. Timoshenko stated that, once Gazprom has completed talks with Central Asian suppliers, the final price Ukraine will pay will be determined based upon the agreement reached at her talks with the Gazprom chief.