(RIA Novosty) Ukraine's national oil and gas company Naftogaz said Friday it might be unable to pay for gas imports if the Finance Ministry did not drop unfair financial claims to it.

"If Finance Minister [Viktor] Pynzenyk continues [to pursue] an inappropriate policy toward Naftogaz, we will not be able to pay for natural gas imports, and the finance minister will be responsible for that," board chairman Oleksiy Ivchenko said.

Ivchenko dismissed the minister's charges that Naftogaz had tax arrears in the first quarter of 2006 and accused him of attempting to solve the country's financial problems at the company's expense.

Popular Russian daily Vremya Novostei reported Thursday that the tax problem arose after Naftogaz started receiving gas from Rosukrenergo, a gas transportation company 50% of which is owned by a subsidiary of Russian energy giant Gazprom with the other 50% held by Austria's Raiffeisen Bank. The January 4 deal ended a bitter dispute over gas prices between Russia and Ukraine, but terminated the previous inter-governmental agreement with Russia, under which Naftogaz was exempt of value-added tax.

Ivchenko also complained that Naftogaz had to sell gas to households 2.5 times cheaper than it was bought from Rosukrenergo. Ivchenko said Naftogaz could not afford to subsidize gas prices, as the company's loss in the first quarter had hit 2.6 billion hryvnyas (over $500mln).

"If the situation persists, our company's losses in 2006 would reach 7.5 billion hryvnyas ($1.5bln)," Ivchenko said.

Vremya Novostei said Naftogaz had proposed raising gas prices for households by 60% starting from July. The Finance Ministry opposed the move and proposed instead cutting the company's investment in production in Ukraine and demanded Naftogaz drop planned and signed projects abroad.

The government's further reluctance to address problems facing Naftogaz, which provides 10% of the state budget's revenues, would result in the company's "death from famine" and would be tantamount to a crime, Ivchenko said.


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