Publication: Monitor Volume: 2 Issue: 19

Negotiations in Kiev on transit fees for Russian oil piped through Ukraine adjourned January 24 after three days of fruitless meetings. Another round of talks between delegations representing Russia’s Fuel and Power Ministry and Ukraine’s oil and gas state committee is due to commence February 2. However, members of both delegations expressed skepticism regarding the possibility of an agreement. At the talks, the Russian delegation continued to insist on reinstatement of 1995 fees, while the Ukrainian side defended fee increases introduced January 1 as lawful and economically justified. (See Monitor January 4 and 11, 1996.) A further contentious issue emerged when Russian delegates insisted that transit agreements be concluded between governments and Ukrainian delegates supported agreements between oil supply and transport firms. Despite the Russian Ministry’s rejections of the new fees, many Russian oil firms have already accepted Ukraine’s moderate fee increase and have concluded contracts with Ukraine’s Druzhba pipeline system to deliver oil to central Europe in 1996. Moscow has obliquely warned that it may retaliate by halting crude oil deliveries to Ukrainian refineries. Meanwhile, Russia’s Gazprom and Ukraine signed an agreement January 20 on the transit of Russian gas to central Europe via Ukraine. (11)

Hit by Russian Excise Taxes, Ukraine Seeks Other Trading Partners.