[oil and gas] brinkmanship means a long cold winter for ukrainians

Ukraine may still face an energy crisis this winter, Deputy Prime Minister Andriy Klyuev said on Thursday, Aug. 17, despite assurances from Russia that it will not sharply raise the price of gas supplies to its neighbour.

Simple statement, yes? The DPM should know, right? Yes, he knows all right – knows how to play the game of brinkmanship with his fellow countrymen and women. This thing is all about the subsidized gas Vladimir Putin alluded to when, at the press meeting in Moscow before the G8, he said:

Let’s work out uniform rules together. You, for example, represent a German news agency. Why should German consumers pay 250 USD for 1000 cubic metres and Ukrainians 50? If you want to give Ukraine such a gift, why don’t you pay for it? Why do you want us to give such presents?

Klyuev’s position is:

“We can clearly state that we have a gas deficit of about 8 billion cubic meters. We have difficulties with gas supplies, payments, with the financial situation at (state oil and gas firm) Naftogaz and other energy companies,” Klyuev said, quoted by Reuters.

Prime Minister Viktor Yanukovich, who favours closer ties with Russia and was appointed earlier this month after a fierce tug-of-war with pro-Western factions in parliament, won Moscow’s word on Wednesday, Aug. 16, that there will be no big hikes in gas price just yet.

Given the state of play and the fact that Moscow would want to bolster Yanukovich’s position in the Ukraine, their word could probably be taken as read on this matter – for now.

At the start of the year Ukraine was forced to accept nearly double the price - $90, compared with $55 previously and now Gazprom is definitely stirring the pot with suggestions that it could go to $230 next year.

-Mosnews, Reuters, Russian Oil and Gas