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« Monday Morning Quarterback | Main | UN Investigators Want Answers From Assad »
January 02, 2006

Russia Restores Most of Natural-Gas Flow

Haven't they done enough harm already?

Gazprom is the Russian government's largest energy policy instrument - though the company sometimes insists it operates only on business principles. The loss of fuel, if it persists, could shake Ukraine's economy the way the 1973 oil embargo helped plunge the United States into recession. Ukrainian officials said the loss could reverse its modest economic growth to cause a contraction of between 4 and 5 percent this year.

The dispute involves complex arguments by Gazprom, which says the price it wants to charge Ukraine is based on the prices of competing fuels, like diesel and bunker oil, on international exchanges. But not far below the surface, there is the embarrassing loss of a Kremlin-backed candidate in last winter's Orange Revolution.


posted by Ace at 03:14 PM
Comments



Didn't the ex-Chancellor of Germany just become a bigwig over at Gazprom? Or am I thinking of the kid who played the piano in the Peanuts cartoon?

Posted by: Brass on January 2, 2006 03:49 PM

Hey, how come nobody's ever done "Bussia" or "Bushia?" Or did I miss it?

I mean, the parallels!

Posted by: tachyonshuggy on January 2, 2006 03:55 PM

The Russians are just trying to charge Ukraine the same price they charge western Europe. In 2004 the USA paid the same price Russia is trying to charge Ukraine now. And at that price the USA is trying to buy as much as possible, building infrastructure as fast as they can to buy more.

Why shouldn't Russia get as much as they can for their gas, isn't that what Capitalism is? Does the USA make a habit of selling their commodities drastically below market price?

Posted by: Village Idiot on January 2, 2006 04:14 PM

I don't think it's capitalism here. Russia didn't pay Ukraine anything for the rights to build the pipeline across Ukraine territory, they plundered the resources of Ukraine for decades and killed the cream of their national leaders, and we're just coming off an election where the Russians (allegedly) tried to poison the anti-Russian candidate in the Ukraine's election with dioxin-laced soup.

All this crap, and all the Ukraine wants is a wholesale price on their natural gas? That's not unreasonable in my book.

Posted by: Russ from Winterset on January 2, 2006 04:39 PM

That makes no sense. Russians were the victim of USSR communists just as much as Ukranians were, losing millions of people and being exploited just like Ukranians were. Stalin was Georgian, not Russian.

Ukraine does collect transit fees for the gas sent across its territory to other countries, so it is wrong to suggest they are uncompensated for their pipelines.

Ukranians are longing for the Soviet days of communist massive subsidies, demanding prices 1/4 what the USA prices -- while Russia is trying to charge market prices, the same price it charges the USA. Which country is the communist and which one is the capitalist?

Posted by: Village Idiot on January 2, 2006 05:23 PM

Let's be honest here. Putin is trying to punish the Ukraine for its defiance of him. Ukraine should pay market price like anyone else as long as the Russians pay for the privilege of having their pipeline on Ukranian soil and their Southern Fleet harbored in Ukraine's Black Sea. It seems Putey Pute isn't too keen to pay for the latter two. The Ukranians don't trust the Russkies and who can really blame them. It's interesting Putin heaps this abuse on the Euros just as the Russkies take over leadership of the Economic Group. How long before they kick 'em out if this type of behavior continues. Putin can't let go of his KGB perspective I would guess. I think there's more troubles on the horizon with the Russians via Putin as well. Of course the Euros seem to like corruption anyway so maybe Putin and the KGB Gang will fit right in with the lot of 'em.

Posted by: Laddy on January 2, 2006 05:52 PM

Ukranians are longing for the Soviet days of communist massive subsidies, demanding prices 1/4 what the USA prices -- while Russia is trying to charge market prices, the same price it charges the USA. Which country is the communist and which one is the capitalist?

Slicin' like a f'n hammer...

Posted by: scott on January 2, 2006 06:36 PM

It would be one thing if Russia just said that it wanted to charge fair market price to everyone. Nothing wrong with that.

If Russia just wanted to go all capitalist-y, it would up the price for all the former soviet republics. But it's only raising the prices for the republics that won't play ball with Moscow.

And of course, as said above, Putin isn't planning on paying for any of Ukraine's costs.

Posted by: Victoria on January 2, 2006 08:06 PM

If it's OK for the Russians to up the price of natural gas, it's also OK for the Ukraine to up the transit fees charged on the Russian gas pipeline. Capitalism where only one side gets to set terms isn't capitalism, it's commonly called "parenting".

Posted by: Russ from Winterset on January 2, 2006 09:01 PM

The reason that the Russians restored the flow is that the Ukrainians continued to take gas out of the pipeline. So the effect of the reduced flow was to cut deliveries to Europe, not to Ukraine.

Since the pipeline passes through Ukraine, there's really no way for Gazprom to prevent Ukraine from taking as much gas from it as Ukraine wants.

Posted by: Steven Den Beste on January 2, 2006 09:49 PM
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