Russia slaps Ukraine with hike in natural gas prices
In an article titled Russia, Ukraine Quarrel Over Gas, published in the Washington Post on December 17, 2005, Peter Finn describes the relationship between natural gas supplies and Eastern European politics.
Apparently, Russia is not too happy with recent efforts by its former proxy to establish a more independent political and economic infrastructure. In response, Gazprom, a company wholly owned by the Russian state government, has announced that Ukraine can no longer expect to continue to receive hugely discounted prices on its natural gas.
Under the formerly existing arrangement, Ukraine paid a price that is about 1/6th of the price charged for customers in Western Europe. The difference between the discounted price and the market price would add about $1 Billion US dollars to Ukraine’s annual gas bill and might make a number of industries uneconomic.
Dependence is a tough situation that can significantly affect independent thought and action. It will be interesting to watch how Ukraine responds to this threatened price increase.
