Russian President Vladimir Putin said on Wednesday he is satisfied with the Ukraine's readiness to liberalize prices for Russian gas and transit tariffs, the Interfax news agency reported.

Putin discussed with Ukrainian President Viktor Yushchenko the prospects for Russian-Ukrainian cooperation on fuel and energy by a telephone call on Wednesday.

During the conversation, Putin expressed satisfaction over Yushchenko's statement that Ukraine is ready to release prices for Russian gas and transit tariffs.

Other issues in this area will be discussed at the technical level, according to the Kremlin press service.

Putin and Yushchenko also exchanged views on settling issues surrounding Russian gas transit to Europe and shipments to Ukraine, as well as issues related to liberalizing bilateral tariff and customs regulations in this area.

The two leaders agreed to have the appropriate ministries look into these ideas, thinking this issue is primarily about economics.

Prior to this, Russia and Ukraine failed to hammer out an accord on the price of Russian gas during recent negotiations in Moscow.

Russia has asked Ukraine from 2006 to pay a European rate of US$160 per thousand cubic meters of Russian gas, rather than the current price of US$50 -- a long-standing preferential price for former soviet states.

Ukraine had rejected the hike as well as Russia's offer to pay the full market transit price for the gas it sends through Ukraine, in a face-off that could threaten gas supplies to Europe.

Most of Russia's natural gas exports pass through Ukraine to European markets and the standoff has raised the possibility that those supplies could be interrupted. It is known that Gazprom supplies a quarter of Europe's gas.

(Xinhua News Agency December 8, 2005)