Russia and Ukraine reach gas deal

The Associated Press , Moscow

State news agency RIA-Novosti reports that the prime ministers of Russia and Ukraine have reached a deal to settle the gas dispute that has shut off supplies to Europe.

Under the reported deal, Ukraine will pay 20 percent less than the European price for this year. This means a substantial increase for Ukraine in the first quarter but the price could fall significantly later in the year as gas prices are expected to drop.

RIA-Novosti says the deal was announced early Sunday by Russian Prime Minister Vladimir Putin.

The news agency cites Ukraine Prime Minister Yulia Tymoshenko as saying all gas supplies will begin flowing once the contract is signed by the two countries' gas companies.