Author`s name Dmitry Sudakov

Ukraine tries to blame Russia for its own insolvency

The gas dispute between Russia and Ukraine is ready to continue in 2009. Gazprom announced a new price for the Ukrainians - $418 per a thousand cubic meters. Ukraine looks like a suspicious customer, whose paying capacity raises serious concerns. The country virtually snatches up a lot of gas, asks for considerable discounts and fair prices for the future and says that it will pay for everything some time later. Europe is horrified.

The tradition of gas disputes between Russia and Ukraine began during the time of the orange revolution, when the new Ukrainian administration decided to establish law and order in everything, including the gas field. That was the time, when Russia began to suspect that Ukraine may pull its leg. Ukraine tries to find new reasons to explain why it does not pay for the Russian gas. Europe literally gets cold feet thinking that its gas will be lost somewhere in Ukraine without a trace.

It became known a couple of months ago that Ukraine was not making any payments for Russia’s natural gas. The debt amounts to $2.4 billion, according to Gazprom. Ukraine’s Haftogaz wired about $1 billion to Russia and happily reported that the debt issue had been solved.

A second grader knows that 2.4 is more than 1.0. It just so happens that almost $1.5 billion have been lost somewhere.

According to Viktor Yushchenko, the maximum, which Gazprom may hope for in 2009, is the price of $100 per a thousand cubic meters of the Russian natural gas. The price for the year 2008 was coordinated on the level $179 per a thousand cubic meters. However, Gazprom said that Ukraine would have to pay $418 from January 1, 2009 .

Yushchenko’s team believes that the prices on gas depend on the prices on oil. The latter dropped from $145 to about $40 per barrel in about six months. The crude market is subject to serious speculative fluctuations. The price on natural gas is much more stable – it follows the average gas price, but not the oil price.

Sergei Kupriyanov, a senior spokesman for Gazprom said: “Our stance is very simple here. If they think that the price of $100 is fair, then they must go to the market and buy it. There is Algeria, Norway, Qatar and other countries on the market.”

Kupriyanov reminded that the gas price for Ukraine in 2005 amounted to $50 per 1,000 m3 in 2005, $95 – in 2006, $130 – in 2007 and $179.5 – in 2008. Ukraine was supposed to adapt itself to the growing gas prices, the official believes.

In the meantime, Ukraine announced two reasons, for which it is not going to pay back the debt for the Russian gas before the New Year. The first one was voiced by presidential envoy Bogdan Sokolovsky. “It surprises me why Gazprom insists on the question of untimely payments on Ukraine’s part, because Gazprom is perfectly aware of other countries’ debts. There are two countries, whose debt totals over $3 billion,” the official said, but did not name the countries.

In other words, the official means that it is not only Ukraine that does not pay for the Russian gas, so Russia must leave Ukraine alone.

The second reason was voiced by the chairman of Ukraine’s Haftogaz administration, Oleg Dubin. “Even if we assume that we won’t be able to come to an agreement with Gazprom, and the gas shipments will be cut from January 1, it will not affect Ukraine ’s gas supplies. Our reserves will let us live normally till the end of the heating season,” Dubin said.

If Russia cuts or decreases the shipments of its natural gas to Ukraine, Europe will be the first to suffer from this decision, in spite of the fact how much gas Ukraine has at the moment.

President Viktor Yushchenko guarantees that all of Russia’s gas, which Russia delivers to Europe via Ukraine, will reach its customers. Many European countries shuddered at those words. As experience shows, such statements mean just the opposite.

Aleksei Kovalev