KIEV, September 26 (RIA Novosti) - Ukraine's government has proposed allocating 450 million hryvnias ($90 million) in next year's budget to set up a strategic nuclear fuel reserve, the country's UNIAN new agency said.
"I think we will start gradually forming a fuel reserve next year," Yuri Nedashkovsky, head of state nuclear power utility Energoatom, was quoted as saying on Thursday.
He said the allocation had been included in the draft budget for 2009.
The Cabinet plans to create by 2010 a nuclear fuel reserve that would meet the yearly demand of the country's nuclear power plants, totaling 2,400 metric tons. Ukraine currently produces only 800 tons a year.
Ukraine relies almost entirely on Russia for its nuclear fuel imports, but a long-term contract with Russia's TVEL corporation expires in 2010.
Kiev has stepped up efforts in recent years to diversify supplies amid rising prices and energy disputes with Russia.
Energoatom signed a contract in March with the U.S.-based Westinghouse Electric Company on fuel supplies for its nuclear power plants in 2011-2015. The U.S. fuel costs 25% more than Russia's.
In 2005, Westinghouse supplied the Soviet-built South Ukraine plant with a set of fuel rod assemblies, which were used in the reactor core in conjunction with Russian fuel rods for a trial period.
The strong level of energy dependence on Russia, which also has almost total control over Ukraine's natural gas supply, prompted President Viktor Yushchenko to announce plans in January 2006 to create domestic nuclear fuel production facilities.
The decision was sparked by a fuel price hike by TVEL in late 2005, and a natural gas debt row with Russia's state-controlled monopoly Gazprom at the start of 2006, during which Russia turned the taps off to Ukraine.