Associated Press - 01.10.2006

Ukraine Dismisses Cabinet Over Gas Deal

KIEV, Ukraine (AP) -- Parliament fired the Cabinet Tuesday because of a new deal with Russia that nearly doubled what Ukraine pays for natural gas. Prime Minister Yuri Yekhanurov and the justice minister, however, said the vote was nonbinding and vowed that the current Cabinet would continue working.

''People just wanted to play around, this will have no effect,'' Yekhanurov told reporters.

''The Cabinet can be formed only after new elections on the basis of a parliamentary coalition, which must be formed by the parliament within a month after the election,'' Justice Minister Serhiy Holovaty said.

Russia and Ukraine last week ended a bruising public fight over the supply over natural gas to this ex-Soviet republic with a deal with nearly doubles the price of gas for Ukraine. Earlier, Yekhanurov defended the deal, calling it a ''compromise'' needed to prevent Ukraine from being deprived of gas supplies.

Lawmakers in the 450-seat Verkhovna Rada voted 250-50 with two abstentions to fire Yekhanurov and his Cabinet, but required that the government continue work until a new Cabinet is appointed.

Political experts and analysts contacted by The Associated Press were divided over whether the parliament could fire Yekhanurov's government. Some experts said the parliament can dismiss only specific ministers, but not the whole Cabinet. Others said the Cabinet could be fired.

Opposition leaders complained the price for gas was too high for its industries and will eventually pinch private consumers. They also said the deal gives Russia too much leverage over gas imports to Ukraine and endangers Kiev's energy security.

Last year, Ukraine adopted constitutional reforms that significantly boost the powers of the parliament and allow it to appoint the Cabinet. Yekhanurov has argued that since the reforms came into effect on Jan. 1, the new Cabinet can be appointed only by lawmakers elected in the March parliamentary election.

Opposition lawmaker Nestor Shufrych, of the Social Democratic Party (United), acknowledged that the parliament's resolution had no legal power.

''Yes, we know that we cannot dissolve the Cabinet ... we are familiar with the Constitution,'' Shufrych told reporters.

''We deprived the Cabinet of the opportunity to make decisions,'' he said.

Under the deal between the two countries, Ukraine must pay $95 for 1,000 cubic meters of gas, up from $50.

On Jan. 1, Russia's state-owned natural gas monopoly Gazprom cut off supplies to Ukraine after the country refused to meet its demand for a fourfold price increase. Other European countries also reported drops in their supplies and Gazprom accused Ukraine of siphoning off gas bound for Europe in a pipeline to the West -- a charge Ukraine denied.

Russia supplies about one-quarter of the gas consumed in Europe and 80 percent of that goes through Ukraine.

The battle over energy supplies with Russia is likely to boost Ukrainian President Viktor Yushchenko in the March parliamentary elections. Yushchenko's popularity has plummeted since his 2004 rise to power. Some polls had shown his bloc coming in well behind the Kremlin-backed party that opposed the 2004 Orange Revolution.