Russia Halts Natural Gas Deliveries to Ukraine ... Again

Russian gas pipelineOnce again, Russia has halted natural gas deliveries to Ukraine. The cutoff began at 10:00 AM January 1, 2009 after talks over a new energy contract between the two countries broke down.

Gazprom, the Russian gas monopoly, followed through on its threats after Ukraine’s leaders united to demand that Russia pay more to ship fuel to Europe through Ukraine. To avoid panic across the European continent and as a sign of goodwill, Gazprom is increasing shipments to other countries to avoid midwinter disruptions.

The dispute is about Russia wanting to charge higher prices for gas next year and collect over $2 billion in Ukrainian gas debts so far this winter. Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, coming together in a rare display of solidarity, called on Russia to resume talks and continue providing fuel to their country at last year’s prices until a new contract is established. They offered to pay $201/1,000 cubic meters of gas, but also demanded that Russia pay at least 15% more for using Ukraine’s pipelines for gas deliveries to other European countries.

Before the talks collapsed, Russia offered a price of $250/1,000 cubic meters of gas, but Gazprom chief executive Alexei Miller has now stated Ukraine would have to pay $418/1,000 cubic meters of gas in 2009. That is more than double what Ukraine paid last year.

If this sounds familiar, Gazprom cut Ukrainian gas supplies in 2006 after a similar dispute, except that time supplies to the rest of Europe were affected.  Also, in March 2008, Gazprom decreased supplies of natural gas to Ukraine until the former Soviet republic paid outstanding debts.

5 Comments

Communist Russia is at it again... wonder who is wagging the dog over there?

Putin claims he does not want Russia to return to the pure Communist way of doing things. I believe that is true, but he seems to want something leaning closer to a totalitarian regime than a true democracy. He wants to do what he thinks is right, without being questioned by anyone in government or Russian citizens.

To answer your question, many people would assume it's Putin controlling things. Popular belief is that Dmitry Medvedev is nothing more than Putin's puppet in the presidency.

The Kremlin is extremely concerned about the possibility of Ukraine joining NATO. This is not new - the anxiety was there during Putin's presidency, too. I would not be surprised if Russia is trying to teach Ukraine a lesson and show who the "real power" is in that region.

Back to your question, if you trace connections, Alexei Miller, chairman of Gazprom, has links to Medvedev through their time with that company. Miller also served under Putin in St. Petersburg in the late 1990s. Medvedev, of course, was Putin's chief of staff, served as Putin's First Deputy Prime Minister and was Gazprom's chairman until he assumed the office of Russian President. Everyone of importance on the Russian side can be traced back to Putin ... Hmmmm

Thanks for the link :-)

Sometimes Russia is just provoking other small countries!