Helen Womack, in Moscow
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Pent-up political frustrations and fears about the global economic downturn are complicating what should be routine negotiations between Russia and Ukraine on gas prices and threatening to give Western Europe another headache over its energy supplies this winter.
Moscow and Kiev each accused the other today of being the first to walk out of New Year’s Eve talks on a gas supply contract for 2009 - and both hurried to take their cases to the EU, lest Brussels suspect either of political game-playing. Both assured EU states that their supplies would continue as normal, and indeed stockpiles in Ukraine and the West mean there is no immediate threat to hearths and homes in Western Europe.
The two sides are arguing over a $49 difference in the gas price. Russia wants to raise the price from $179.5 per 1,000 cubic metres to $250, while Ukraine says $201 should be enough. But a whole political and economic subtext thickens the plot.
No love has been lost between Moscow and Kiev since the 2004 Orange Revolution, but relations worsened last year when Ukraine threatened to refuse re-entry to its Crimean ports of Russian warships that had sailed to the Abkhazian coast during the war with Georgia. The Kremlin was outraged at what it saw as Ukraine’s disloyalty.
Vladimir Putin, the Russian Prime Minister, looked completely exasperated as he reported to his President Dmitri Medvedev, his protégé-turned-boss, that Ukraine had - once again - rejected Moscow’s "humanitarian" offer (the market price should be $418). Both knew the crisis would again make Russia look as if it was using its energy advantage to bully a smaller, former Soviet neighbour.
Having lost the initial propaganda war with Georgia last summer, Russia seemed determined to put its case to the West quicker this time and Mr. Putin telephoned European Commission president Jose Manuel Barroso to explain his stance in the gas row.
Pro-Kremlin political analyst Gleb Pavlovsky said in remarks published by Interfax that Ukraine was playing a "gas game" to spoil Russia’s relations with the EU. Ukraine had prepared in advance by filling its underground gas storage tanks, he alleged. "So if we are told that Russia, by cutting gas deliveries, is strangling Ukraine with hunger and cold, this will be a barefaced lie. Ukraine has deliberately created this crisis to blackmail Russia."
Ukrainian President Viktor Yushchenko has yet to comment on the row but Kiev said it had approached the EU for understanding, was ready to continue talks and hoped for a new gas deal by Orthodox Christmas on January 7.
Already impoverished Ukraine has been badly hit by the recession; indeed Mr. Putin claimed it was on the verge of national default. But Russia, while blaming the US for the economic downturn and refusing to pronounce the word "crisis" at home, is also facing rising unemployment and a sliding rouble. Ukraine needs the cheapest gas deal it can get while Russia, still over-dependent on energy exports, needs to keep prices as high as possible.
Both Russia and its neighbours fall back into a Soviet mentality from time to time. Russia is trying to move its economic relations onto a market footing but continues to subsidise countries, such as Belarus, that it perceives to be friendly and loyal.
The former Soviet republics insist on their independence but are not averse to taking handouts from Big Brother when it suits them.
For Vladimir Milov, a former Russian deputy energy minister, this was the root of the problem. The Russian gas company Gazprom’s image was harmed by repeated scandals ensuing from the fact that it sold gas to different countries at different prices, he told the Echo of Moscow radio. In future, it should conduct its energy dealings more professionally and without so much public fuss.
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To Richard, Bucharest
Dear Romanian fiend, Yes, you have Russian gas cut off. But who do it? Russians or Ukrainian gas companies? Answer yourself this question and you will see who will not be wellcome in the HolyLand - Romania
Konstantin, Moscow, Russia
Bucharest has already had power cuts after its Gas supplies have been reduced by one third.
The EU is useless & needs to make a strong stand.
The spat between Ukraine & Russia is between those 2 countries alone.
Putin is not welcome in Romania again
Richard, Bucharest,
To prevent transit problems and boost efficiency Russia must switch from pipe gas exports to liquid gas. Pipe gas should be reserved for universal domestic consumption to reduce cost of production,improve life, environment, export prices, extend the use of gas stocks, compete better abroad, etc.
Alexander Makarov, Velikie Luki, Russia
The EU should clearly state their approval for Russia's actions the Ukraine has no right to free gas and no right to our support .
Crowther, Silsden, Keighley
Ukraine is demanding Russia sell it gas at half the world price. Russia is willing to subsidize the gas at 60% of the world price, but Ukraine demands 50%. Why on earth should Russia give any subsidy whatever to what has become a very unfriendly pest on its border?
Arik Silverman, Milwaukee, USA
It is a pure capitalism, People, nothing more. And the "pay or go away" is it`s main principle. If you don`t like to obey the rules of a game - don`t play it.
Peter, Vladivostok, Russia
Employ the 600,000 bankers who are shortly to be made redundant in the UK as coal miners and build more coal fired power stations.
keith, WELSHPOOL, UK
E.U. countries have to talk and work together with Russia as with other Eastern European countries, otherwise a new divide between East ans West will come. Above all not do things behind Russia's back.
Arnold Kramer, Ulestraten, Holland
Why are we not building new coal power stations and nuclear reactors now, it will make lots of jobs and cheaper than importing gas. This government wants to save the world what about the UK Mr Brown?
donna baily, Liverpol, UK
Gazprom wants Ukraine to pay its debt and is offering to sell gas $250 per 1,000 cu mtr compared to the EU average of $500. Ukraine does not want to pay that price. Fine. Don't buy it then. But Ukraine shouldn't steal gas bought by EU countries just because it passes through its territory.
Marco Borg, London , United Kingdom
Elena, Perm0, Russia
That's what they say on the russian tv? it's all one-sided, they never tell you fully what ukraine says about this problem,
Alex Coman, Medgidia, Romania- how do you imagine russia diverting all european gas to china? it's not going to happen overnight, not even in ten years.
Alex, worthing, UK
Nuclear isn't that good: uranium supplies running low and come from inherently unstable sources; still haven't cracked problem of radioactive waste; weapons link. We need more research on renewables: AERE suppressed results of wave energy project years ago - we should have invested in that already
John, Péault, France
It's only natural to break off the business relations when one of the sides fails to follow the agreement. Why blame Russia, when it's Ukraine who rejects to pay for the cheapest gas in Europe?
Elena, Perm0, Russia
We must engage with Russia to ease tensions especially over the American anti-missile system. There is no need for it to be on Russia's doorstep... negotitate... perhaps place it in Russia with joint US-Russian Staff running it.
Regarding Oil, go Nuclear and Renewable and avoid these problems.
Chris, Belfast, UK / Ireland
Karl,(who wrote: I always wanted Communism to smash the capitalist West anyway.Karl, Highgate, Soviet Union)
What are you doing in Highgate then?! Shouldn't you be living (or resting) somewhere near gulags, to show the tourists the achievements of the communism in Soviet Union?
Marie, Amersham, UK
Russia could easily sell all the gas to China and other countries from Asia. Rusisians choose to work with Europe because they are part of Europe. Ukraine is just doing the USA game. Just as that smart president of Georgia showed to us, so Ukraine try to fight USA fight against Russia.
Alex Coman, Medgidia, Romania
Guys, not so bad here. This article (as always) is focused on Russia. Putin said etc. The problem is as follows: They wanted to raise gas prices for Ukraine to "European" levels and leave price for transit through Ukrainian soil at "Soviet" level. Yushchenko said "both or none of it".
Valerii, Kyiv, Ukraine
Ukraine is to blame for higher prices for not paying it's gas bill. However, the intentions of Russian politics and business is neither honourable or fair. They have the West by the gonads because they control the energy, it's that simple. We need to take action, and quickly!!
Vanessa Deagan, London, United Kingdom
Russia is always accusing other countries of trying to "blame" Russia for everything. How else should the west react to the way Russia behaved over Georgia. How else should the west react to Russia cutting off Ukranian supplies. Russia is not he victim, but the villain.
Nick, London,
We in Pakistan is having gas shorage. Our own reserves are depleting very fast. One alternative for this energy shortge is to get gas from Iran and Turkemenistan. West should reconsider its policy about Iran to help looming energy crisis in South Asia. Instead of wars, west consider solve issues.
Farhat, Windsor, Canada
So, the oil producers have their little cartel and now the gas producers are wanting the same. Surely it's time for the customers to form their own buying consortium. The best defence against price increases is consumer reluctance to buy.
Rokola, Chiang Mai, Thailand
When Stalin starved the Ukraine in the early 30's who helped? No one from Europe and no one from the Empire. My mother remembers the Americans in their cylinder hats who oversaw the distribution of basic food which saved many people.The problem is that the EU is weak.
steve, cambridge, UK
What Russia and the Islamic states couldn't do by war - they are now seeing they can do by energy and resources blackmail or ransom.
Our juvenile and self serving politicians never saw it coming.
Churchill and his ilk are crying in their graves at waht UK governments have allowed to happen.
Chris Williams, Bridgend, UK
This shows how dangerous and irrational the Russians are. BBC News reports that Ukraine is getting gas at $250 per 1,000 cubic metres when the price in Europe is currently over $500. Putin is milking Europe and there is little security over our gas supplies. Another fine mess created by Brown!
Jon, Preston, England
This supply problem is becoming boring. It has happened every year for the last 10 years. Give it a rest reporting on this boring rubbish. I don't give a toss if the Russians cut off all supply to Ukraine and Europe. I always wanted Communism to smash the capitalist West anyway.
Karl, Highgate, Soviet Union
Russia's $600 million fine imposed for late payment is undeniably extortionate. It is imperative that new oil pipelines are constructed from the Baltic so that Western countries can avoid the schisms created by this relatively recent phenomena: "Pipeline Politics".
Ben Shaps, London, UK
During winter it is the same old problem with Ukraine.Russia
is building two pipelines one for Germany and the second
bypassing Ukraine for South Europe,until than Ukraine will
blackmail Europe.Those who are not Europeans should
understand that Russia is part of Europe.
Bruno, Cesena, Italy
The current Russian gas supply problem with Ukraine, and ramifications for Europe, hignlights the need for the UK to construct more/adequate gas storage facilities and commence more Nuclear Power stations to further supply our needs.
John, Port Talbot, Wales
Ukraine had agreed the prices for supply of gas for 2008 and therefore owe the monies and penalties as per the contract. If you don't pay for your gas, then you get cut off; simple as that. Russia are in the right on this.
Johny, Kings Langley, England
The EU primitive polititcal poiints of view that we are so naive
about Russia`s military and political ambitions.
If EU is one family where are our pragmatical polititicians to
make a good solutions for not depending Putin`s GAS&OIL
strategy?
rj , auckland, Nzealand
The big love with Soviet aerea divided Ukraine intwo 2 different part.The Ukraine ha sgot 2 ways: towork wih EU or
to surraunder to Russia.
rj , auckland, Nzealand
I predict a big increase in sales of wood burners this year.
Sue Doughty, Twyford, UK
The EU has only in tendency an alternative of 1 or 2 o 3or 4 or 5 polar W0rld.The cohesion of EU`s countries a long way marsh.If EU wants to become a part of 2 or more polar world
all of it`s part countries must be start a compromission
. This Roman internet doesn`t work well!
rj , auckland, Nzealand
Relax people,1 in 4 people in the uk(approxiametly-12.5million) have a digestion problem, they tend to pass out EXTRA gas. Those people could be our saviour. Now Enjoy yourself and stay tuned for the fight when Klitschko Ko Haye.
Wladimir Klitschko, Kiev, Ukraine
I'm surprised the ukraine hasn't tried to build/gain suppliers from other countries given this is not the first time Russia has played the "no gas" card on them.
R, Croydon,
Once it is accepted that most governments are rather sociopathic, it is NEVER a good idea to poke a bear with a stick.
Robert Henry, London, UK
Why i don't see a single word in this article about debt that Ukraine STILL has. Ukraine owns us 2.5 billion $ for the gas and she refuses to pay it off. Russia said it so many times that we wont sign the contract on 2009 if Ukraine wont pay us. BTW the contract on the transit is signet till 2010.
Dmitry, Moscow, Russia
So silly when France is a leader in nuclear technology. Wake up, EU, you can change this.
Neil, Norwich, UK
If you don't pay your electricity bills on time, you get interest. If you don't pay at all, the company comes and turns it off. If this is normal, why then does the word "Russia" change the situation? The Ukrainian position is ridiculous, especially considering they are getting gas at half price
Seva, Silves, Portugal
Never trust communists nor muslim states for that matter.!Europe has to become energy self sufficient the faster the better to avoid beng held at ransom.
Bjorn, Europe,
Leave it to North Britain Man. He will be on the case as soon as he finishes saving the world.
Thank goodness for gordon.
tris, dundee, scotland
Why do not people realise
Russia earns income from Gasprom and as the price of gas goes down it earns less income
They are solving an important problem with a solution that has consistently pushed the price of gas up, notice they do the same every year and it always pushes the price of gas up
Nicholas Iles, Oswestry, Shropshire, United Kingdom
russia is strugling with lower price of natural resorces,why now?during the winter? because russia can. price- if russia can sell higher why she can't, because there is no other road to west. if there would , price would be higher allready.russia has nothing besides of natural resorces.
pav, chigwell, uk
Remember that Russia is seeking a price of $700+ per 1000 cu. metres for 2009. The fun has only just begun!
Mike, Huntingdon,
And no one saw this coming many years ago? Common sense people, common sense.
M.J., Iowa, U.S.A.
Russia is saddly entering a new phase of the Cold War days - it has aspirations to hold Europe. the UK in particular, to ransom due to our dependancies on oil and gas from that region. New Labour have had a decade or more to mitigate such an event, and have achieved nothing as usual!
P. Owen, Glasgow, UK
I have to say I have some sympathy for the Russians, normally potrayed as the bad guys.
Ukraine wants to distance itself from Russia and make friends with the West - fine - but it can hardly then expect cut-price energy from Russia for ever, can it?
Nick, France,
Ukrainian oligarchs demand further gas subsidies from Russia again, again and again. They could go to Europe or to gas supplies from Middle Asia and ask subsidies from there.
Mikhail, Penza, Russia
It seems to me that it's the Ukrainians that are blackmailing Russia with the threat of cutting gas to the rest of Europe. Of course all you anti Russians can't see that. The Ukraine have been offered gas at significantly less cost than the rest of us.
derek, East Yorkshire uk,
I agree with Mike, London, UK:
This has been an issue for well over a decade, and the Labour government has to so little to curb the influence that Russian resources have on our sway in international politics. I see this as only a negative influence, one that MUST be removed.
Kazuki, Tokyo, Japan
I wonder what 'The Saviour of the World' is going to do!!
Louis, Liverpool, UK
Time for Russia to build a new pipeline to Western Europe that bypasses the Ukraine.
And time for Western Europe to invest in more nuclear power.
Keith S, Winnipeg, Canada
maybe EU should funally wise up to the fact what kind of dishonest partner Ukraine is.
John, Newark,
This is ridiculous and yet again the UK is at the mercy of Gazprom. Why on earth are we in such a position when Labour have known this was going to be a problem for 11 years ?. What have Labour done ? .NOTHING. This Labour Govt is PATHETIC.
mike, london, uk
i really dont care about global warming, but these kinds of things are reasons for us to be investing in energy supplies that arent reliant on us digging up dead plants and animals.
will, grimsby, uk