High level diplomatic contacts are taking place to try to resolve the dispute between Russia and Ukraine over energy prices which has reduced gas supplies to large parts of Europe.

Earlier, Russian gas monopoly Gazprom said it would increase the supply of natural gas to European customers after a number of countries reported that their supplies had fallen by up to 40%.

The shortfall happened after Moscow cut Ukraine's provision accusing Kiev of siphoning off $25 million worth of gas intended for other European customers.

Ambassadors from Europe, the US and Japan met the Ukrainian president, Viktor Yushchenko, who told them he is willing to go into arbitration.

The EU's foreign policy chief, Javier Solana, urged Kiev and Moscow to resume negotiations.

Bord Gáis has said Irish customers will not be affected by the crisis. Most Irish gas comes from the North Sea through Britain. 

The chairman of the Commission for Energy Regulation, Tom Reeves, has said he does not see any increases in the short term.