In his radio address to the nation, Victor Yushchenko said gas prices in the municipal sector would not be cardinally raised in the near future, the President's press office reported.

“I would like to assure you that gas prices for the people will not radically increase in the near future. We will use mostly national gas to service the municipal sector and the budget area,” he stressed.

“We should accept that one should pay for everything. First of all, we should pay for our independence. If Ukraine really wants to be economically independent, sooner or later we will have to develop market relations in the energy sector and rationally use energy,” he continued.

The President, however, said he hoped the gas issue would not be “a new Tuzla in Ukrainian-Russian relations.” He stressed that Vladimir Putin adhered to the same opinion. Yushchenko noted that during their telephone conversation on Friday they agreed to settle this issue economically.

“We should defend our national interests first,” he said.

The Head of State thinks all political forces “should be particularly responsible for building friendly relations between the two brotherly peoples.”

“We must not provoke distrust or disrespect in our relations by any statement or action,” Yushchenko said. “This is the thesis we follow in our talks with Russia.”

The President also said he was convinced Russia and Ukraine would only benefit from having market relations.

“I am sure that the increase of prices should be gradual – without any 'shock therapy' for the national industry. At the same time, energy prices should be reasoned economically rather than politically,” he noted, adding that it was important to elaborate and introduce a “transitional system of gas tariffs to minimize the negative impact for the population.”

Yushchenko believes such a tariff system should be used for two or three years before introducing unified gas prices.

The Head of State also stressed that the new Ukrainian government made many attempts to diversify energy sources and to produce more oil and gas. He said this week the cabinet had held talks to receive a two-billion-euro investment to produce oil and gas in the Black Sea shelf.

The President stressed that energy saving was a very important issue for Ukraine because it "is still the most energy-consuming economy in Europe."

“We use three times more gas to produce goods than our closest neighbors. Unfortunately, Ukrainian industrial 'giants' got used to paying so little for energy and so have not invested in modernization of their plants for years. At the same time, Europe tries to save each cubic meter, each kilowatt, and each cent,” he said.

Yushchenko reiterated that an energy saving agency would soon be established in Ukraine to consider projects on the rational use of energy, programs on alternative energy sources, and initiatives to develop the system to produce oil and gas.


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