FINANCE ministers of the world’s leading nations have failed to agree on reforms to Russia’s energy market amid fractious talks in Moscow.

European countries at the G8 finance ministers’ meeting tried to hold their host nation to its pledges on energy security at the weekend, amid concern over Russia’s brief suspension of gas supplies to Ukraine.

Specifically, France called on Russia to accept the terms of the Energy Charter Treaty, which guarantees the free movement of energy supplies. Russia has signed, but not ratified, the treaty.

Russia, the world’s biggest oil exporter after Saudi Arabia, is also the supplier of a quarter of Europe’s gas consumption. It has defended its decision to cut supplies to its neighbour on the ground that Ukraine was not accepting the decision of Gazprom, the Russian state-run producer, to move to market prices.

However, diplomats saw the move, on January 1, the day Russia assumed the presidency of the G8, as a worrying sign that the country would use energy security as a bargaining chip for political gains, buoyed by a rise in oil prices that has enriched the smallest economy in the G8.

Thierry Breton, France’s Finance Minister, said: “The recent Ukrainian affair shows that the dialogue between Europe and Russia could function better.”

He added: “Russia has signed the charter and must now ratify it. The position of us all is that there has to be better visibility and reliability of supply . . .transit and prices. There is a framework in the energy charter which would allow us to do this.”

However, Alexei Kudrin, Russia’s Finance Minister, made clear that despite what he described as “stormy” and “tense” debate, Russia would not be hurried on implementing the charter.

Mr Kudrin said: “Clearly, all discussions between ministers are usually quite tense because this is a struggle and fight of different opinions . . . Every minister protects the interests of the community he or she represents.

“We talked about the energy charter, but I’m not getting into that at the moment. We will continue to discuss the charter.”

However, Mr Kudrin said that the Government was working towards giving independent gas producers equal access to the state-controlled pipeline network.

The G8 finance ministers concluded their meeting with a statement emphasising the “vital” role of stable markets in ensuring energy security. Despite concern over high energy costs, they said that “solid” economic growth is likely to continue in 2006.

Ministers also agreed to make progress in combating terrorist financing. Gordon Brown will give details today of a strategy for Britain to deal with the problem. The Chancellor kept a low profile at the G8 talks, where he was the only finance minister not to give a press conference or briefing.

John Snow, the US Treasury Secretary, suggested that Russia could soon be let into the World Trade Organisation. The US is one of the few countries yet to agree on WTO membership with Russia, but Mr Snow said: “I think we’re in the home stretch.”

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