RUSSIAN "POLITICAL SHOW" DOES NOT STOP FLOW OF OIL.

Ukrainian president Leonid Kuchma yesterday accused Russia’s Fuel and Energy Ministry (Mintopenergo) of "staging a political show" in opposing Ukraine’s recent transit fee increase on Russian oil piped through Ukraine. Ukraine is within its rights to raise the fees unilaterally, said Kuchma, just as Russia does when it charges Ukraine higher prices for oil. He pointed out that Ukraine paid an average of more than $ 100 per ton for Russian oil in 1995, compared to $52 in 1994.

Kiev increased the transit fee January 1 to $5.20 per ton for each 100 kilometers of pipeline, compared to $4.53 in 1995. After a brief halt in the deliveries at the beginning of the year, more than 30 Russian firms signed short-term contracts with Ukraine for piping their oil to central European countries at the new transit fees. Mintopenergo officials have threatened to retaliate against Ukraine by reducing crude oil deliveries to Ukrainian refineries, but such a move would also damage Russian economic interests and therefore lacks credibility. Talks between the Russian Ministry and the Ukrainian oil and gas state committee were tentatively scheduled for later this month, but Mintopenergo has demanded that Ukraine revert to last year’s lower transit fees as a precondition for talks. (14)

Moscow Said to Agree to Measures Against Abkhazia.