Russia and Uzbekistan OK gas price formula

Russian Prime Minister Vladimir Putin said yesterday that Russia and Uzbekistan agreed on gas pricing for imported gas to Russia. According to Putin, the formula is based on global gasoline and fuel oil prices. Vladimir Nesterenko: Although Uzbekistan accounts only for 6% of gas sourced to Ukraine from Central Asia, the news points toward Russia and Central Asian countries (Turkmenistan, Kazakhstan and Uzbekistan) being in the process of implementing their framework agreement from March 11 on market pricing for gas starting in 2009. This implies little chance for Ukraine to avoid a gas price hike next year, of around 80% according to our estimates. For details, see our report from March 12 and a follow-up note from June 11.