Ukraine's new prime minister flew to Russia on Tuesday to try to persuade his powerful neighbour not to go ahead with a threatened hike in gas prices that could strangle the Ukrainian economy, Reuters reported. Pro-Moscow Prime Minister Viktor Yanukovich, humiliated in Ukraine's 2004 "Orange Revolution," returned to power two weeks ago promising to restore economic growth but his success could hinge on a favourable gas deal with Russia. In January, Russian gas giant Gazprom hiked gas from $50 to $95 per 1,000 cubic metres. A row at the time briefly disrupted supplies of Russian gas to Europe via Ukraine. Gazprom has warned of another increase of up to $230 from 2007. A gas price above $120 would hurt the competitiveness of the energy-hungry heavy industry that drives Ukraine's economy, say analysts. Yanukovich arrived in the Russian Black Sea resort of Sochi where Russia's President Vladimir Putin is hosting an informal summit of ex-Soviet leaders. The Ukrainian prime minister is to have talks with his Russian opposite number Mikhail Fradkov on Wednesday. Russian media said he may also meet Putin. The "Orange Revolution" unsettled Russia because its supporters want to take Ukraine into NATO and the European Union. Yanukovich, by contrast, favours closer ties with Russia. That stance should win him a warm welcome in Sochi but may not be enough to secure cheap gas from Gazprom. It says it is determined to phase out the practice of giving preferential rates to ex-Soviet states.
