Wednesday, December 14, 2005

The Energy Lever and Ukraine - III

The Financial Times points out yet another aspect of the energy lever - Russia is in fact threatening to cut gas supplies to Europe as a whole, not just to Ukraine, if Ukraine doesn't agree to the drastic price increase demanded by Gazprom:
Alexander Medvedev, the Gazprom executive in charge of exports, said that if no agreement was reached by the new year, Gazprom would limit the volume of gas crossing the Russia-Ukraine border from January 1 to the amount contracted by its other European customers and excluding any portion for Ukraine.

If Ukraine maintains it has the right to continue taking a portion of the gas as payment for transit, Gazprom would regard that as "unsanctioned removal of gas or, in other words, theft".

"Ukraine would be fully responsible for reduction of supplies to Europe", he said.
Last week, a Ukrainian presidential administration official said Russia's naval base in Sevastopol could, in turn, be asked to pay "European" rents.

Russian officials said the base's contract was not negotiable.
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