The traditional Russian New Year's gift to Ukraine is going to be the same this year. A shut off of natural gas supplies because of a demand of even higher gas prices, at $400 per cubic meter to be exact - more than double of the current $180 Ukraine is paying. Given that 2/3rds of Ukraine's gas comes from Russia, that's a huge hit and an enormous transfer of wealth out of Ukraine into Russia. Yulia Tymoshenko has offered a reasonable idea of a 5-year price transition period to avoid the annual ultimatums and shutoffs.
'"It's not that it's unreasonable by European standards, it's just that they can't pay it. Ukraine is a gas-based economy, and they'd have to take the most enormous hit," Stern said.'
Europe faces fresh New Year Russian gas crisis
TOM MILES
Reuters
July 8, 2008
http://www.theglobeandmail.com/servlet/story/RTGAM.20080708.wrussiagas0708/BNStory/energy/?page=rss&id=RTGAM.20080708.wrussiagas0708
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