http://online.wsj.com/article/SB123080339916446769.html?mod=djemEMU
Hell no. Just pay the bill, Ukraine!
They already get gas at a much cheaper rate than do other European countries, to the tune of less than half. But, the recent dispute, the Ukrainian government wants a deeper cut?
Russia has cut them off as of Jan 1st 2009. Ukraine should just pay the bill.
The recent row is over a proposed hike in prices, from just under $180 per thousand cubic metre's to $250 per thousand cubic metre's. Western Europe, on average, pay over $500 per thousand cubic metre's.
While the Russians claim that Ukraine has not been paying it's taxes on oil, seeing that the Ukrainians have such a sweet deal, they, should, pay their bills!
At that rate, it's a wonder why Russian firms went along with that program for so long.
But, the story goes way back to the late 90's and before, with the signing of the Friendship treaty between two countries.
http://query.nytimes.com/gst/fullpage.html?res=9E0DE0DD1F3AF932A35755C0A961958260
Russia, then under president Yeltsin, promised to forgive the Ukraine of it's debt in oil in particular and to increase commercial ties.
More than 10 years later and we are here at the same issue, with different actors but the same problem!
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2 comments:
Russia Ukraine relations go beyond a dispute over gas prices. And as long as the main pipeline system goes beyond into EU then things get even more complicated. Or maybe not?
Russia way of doing business is more political than economic wise. While maybe in USA the big companies show the white house the way in Russia so far the Kremlin is keeping the companies under a firm grip.
Gazprom share value has tumbled down from 350bn (No3 Co in the world) to 75bn (No70+). Western Banks have increased their pressure for their loans. All that when other western competitors has shown little or zero financial problems. Gazprom used the super profits from previous years to buy off western owned assets in Siberia
The previous month prime minister Putin created an informal "OPEC" for gas producers.
All this may come down to a dual strategy
1.Push Ukraine and deprive EU from gas. That way Gazprom gets its money, rises the gas prices as it is.
2.Russia once more demonstrates to Ukraine that it is more important to be a good neighbor and not join NATO
EU Parliament asked from CEO of Gazprom and Ukraine company to report to them . they seem to ignore the fact that the Board of Directors of Gazprom is composed by ministers of Putin
Ukraine is just stuck between a rock and hard place at the moment
Hi Anon,
Thank you for your reply.
Yes. It does go further that simply gas. Moreover, it has a great much to do with the connection the Ukraine feels it has to mother Russia as a former sovereign capital from the Soviet Union. It almost seems as if the Ukraine feels as if they have a right to cheap and, free, gas from Russia.
Russia, in regards to the oligarch's, maneuver somewhat like the Lee's and their relationship to Temasek in Singapore. The state and the large corporate interests, are very, very, intertwined.
With that being said, no one can deny the money lost to the oil industry--so to speak-- since the price of oil and natural gas went tumbling down. Thanks’ for the information on Gazprom's current value share. (Hemscott normally has the best information for market cap and value share of companies) However, Russia and Gazprom have more than an impetus to raise prices and this may very well do that. What is also a concern, is the possible black market for oil, in an already un-policed region...exacerbating the criminal racket in Eastern Europe.
Well, some may say that Eastern European leaders are criminal rackets in parliament. I would choose to give them a chance at a better democracy, after sifting through which ways are better for a better market under a growing democracy!
Thank you for your response and keep posting.
Youri
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