Economy Minister Anatoliy Kinakh said Wednesday the government calculated the draft 2008 budget by predicting the price at not more than $145 per 1,000 cubic meters, up from $130/1,000 cu m in 2007.

Any increase from that price will now force the government to re-draft the budget and will be a major burden on the state finances, perhaps leading to greater budget deficit, analysts said.

Meanwhile, the Yanukovych government may have been also misleading the public when it had recently reported on successful talks with Turkmenistan, the major supplier of gas.

Energy and Fuel Minister Yuriy Boyko said earlier this month that Ukraine managed to persuade Turkmenistan to leave the gas price unchanged in 2008. The same information was confirmed by Deputy Prime Minister Andriy Kliuyev on Wednesday.

But Oleksandr Shlapak, the top economic advisor to President Viktor Yushchenko, said Thursday that Russia has denied the information, which leaves open an issue of how much will Turkmenistan charge for its gas.

“I don’t know how much trusted are the sources of Andriy Petrovych [Kliuyev], because today there was the denial of this information by our Russian partners,” Shlapak said.

Turkmenistan, which for six years used to supply its gas directly to Ukraine, has changed the practice in early 2006, and is now selling all its gas to Gazprom, the Russian gas monopoly.

Gazprom, at its goodwill, is then reselling the same gas to RosUkrEnergo, a trader in which it controls 50% stake, at $100.5/1,000 cu m, while RosUkrEnergo supplies this gas to Ukraine to sell at $130/1,000 cu m.

The complicated system, which was set up by Russia, makes Gazprom the key intermediary while deciding on how much to charge RosUkrEnergo, and thus Ukraine, for gas.

Russian daily Kommersant reported Thursday that Turkmenistan mulls increasing the price of gas it charges Russia to $150/1,000 cu m from $100/1,000 cu m. Although no decision has been yet taken, such an increase would automatically increase the price that Ukraine pays to at least $180/1,000 cu m, analysts said. (tl/ez)