Speaking out: Viktor Yushchenko
'Kiev must rejig Naftogaz plan'
Ukraine's President Viktor Yushchenko today urged the government to review the financial plan for state energy company Naftogaz, sole importer of Russian gas, warning it could otherwise suffer "dramatic" consequences.
"The company today finds itself in extremely difficult circumstances," Yushchenko told parliament in his annual state of the nation address.
"If its financial plan is not urgently reviewed, the consequences could be dramatic for the company," Reuters quoted him as saying.
A row over the 2009 price of gas for Ukraine and arrears in Naftogaz's payments for previous shipments prompted a cutoff of supplies to Ukraine and to many of Russian company Gazprom's European customers receiving gas through Ukraine.
Prime Minister Yulia Tymoshenko, the president's estranged ally, clinched a deal to end the standoff under which Ukraine is to pay more for its gas - $360 per 1000 cubic metres in the first quarter against $179.50 per Mcm last year.
Yushchenko claimed the accord was a "defeat", while the prime minister said it was the best available deal.
Parliament is to consider a plan to balance Naftogaz's finances as part of legislation needed to restore the flow of credits from a $16.4 billion International Monetary Fund loan.
In his remarks, Yushchenko offered no details of how further help might be offered to Naftogaz. Its finances have been hit by rises in the price of imports since 2005, while the price at which it sells to utilities and households has remained low.
Under the January deal, Naftogaz must settle its monthly bills for imports by the seventh day of the following month. Russian officials saod otherwise it will have to make advance payment for supplies.
It has met all its obligations for the first two months of the year.
The government last week said it planned to lend money to Naftogaz to allow gas to be stockpiled in underground storage areas. It also said it would ask the central bank to sell it dollars at the lower official rate.
Ukrainian media have put Naftogaz's debts at about 34.5 billion hryvnias ($4.5 billion). The company is believed to have to pay off about 25 billion hryvnias in debt this year.