Russia and Ukraine argue over natural gas

CNN:

A former Kremlin adviser has criticized Moscow's New Year deadline for Ukraine to accept a large gas-price increase, saying the demand indicated resurgent Russian imperialism.

Meanwhile on Saturday Europe warily watched the standoff amid warnings that its supplies could also be affected.

Ukraine has hitherto received one-third of its natural gas from Russia at the heavily subsidized rate of $50 (€42) per 1,000 cubic meters, in addition to its domestic supply and imports from Turkmenistan.

But Russia's Kremlin-controlled gas company Gazprom has now threatened to cut supplies to Ukraine on Sunday if Kiev does not agree to pay more than four times the current rate, which is closer to what most Western European countries pay.

"If Ukraine doesn't sign a contract to buy gas by the appointed hour before the New Year, then at 10 o'clock a.m. on the 1st of January we will put a complete stop to delivery of all gas from the Russian Federation to the Ukraine," said Gazprom CEO Alexei Miller. "These actions will be precise and resolute."

The company said the price rise represented a long-overdue transfer to free-market price mechanisms.

...

You have to read pretty far into the story to find that the arguement is over whether Ukraine should pay market prices for natural gas. Other stories have indicated that Ukraine is really argueing over making the move to market prices more gradual to avoid a shock to its fragile economy. It hardly sounds neo-imperialist to demand the market price.

Comments

  1. Reliapundit9:17 AM

    Hi Merv -

    I think the price increase request is more nefarious. here's why (links at my blog):

    FT:

    "Russia has provided its former Soviet neighbours with heavily subsidised gas since the USSR collapsed in 1991 – partly to keep them within its sphere of influence. But now it wants to move to market prices, for what it says are economic reasons. Gazprom, Russia’s massive state-controlled gas company, has already agreed increased prices with several former Soviet states.

    Ukraine says it is being asked to pay far more than any of those, suggesting the motive is political: to punish it for the Orange Revolution a year ago that brought the pro-western Viktor Yushchenko to power.

    Ukraine is being asked to pay $230 per 1,000 cubic metres of gas – up from $50 this year. Latvia, Lithuania and Estonia, all now European Union members, are paying only $110, as is Georgia, which also had a pro-democracy revolution two years ago. Belarus, loyal to Russia, pays little over $46."

    WASHPOST:

    "The chief of Russia's natural gas monopoly, OAO Gazprom, reiterated that it will halt supplies to Ukraine on Sunday morning unless a new contract is signed with its Ukrainian counterpart. ... Meanwhile, analysts said a Russian bid Thursday to buy up natural gas from another major supplier to Ukraine, Turkmenistan, would leave the Central Asian nation with little gas to sell to Ukraine."

    reliapundit: It is OBVIOUS that Putin is NOT merely trying to get Ukraine up to market price. This should make it clear that PUTIN is no better than OPEC was in the 1970's and NOT a trustworthy ally - or a safe energy resource for Europe.

    AND REMEMBER THIS: socialist, vile anti-American and former Chancellor of Germany Gerhard Schroeder is now chairman of Russia's German-Russia pipeline company which is MAJORITY OWNED BY GAZPROM. This makes him a co-conspirator in this matter with his fellow socialist Putin. THESE ARE TWO VERY BAD MEN.

    Love your Blog!
    Happy New Year!

    reliapoundit

    ReplyDelete

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