Russia Halts Natural Gas Flow to Ukraine

Moving away from the axis of Russia after the orange revolution, Ukraine is faced to face with heavy political and economic pressure. The Russian Gazprom company, which sharply increased the price of natural gas sold to Ukraine, will expectedly halt the natural gas flow to the country since Ukraine did not accept the price increase. The possible cutoff will affect the flow of natural gas coming to Turkey from Thrace. While it is wondered whether there will be ‘a last minute’ agreement between the parties, it is reported that a middle way can be found for the solution of the problem with the involvement of the European Union (EU). Offering a new proposal hours before the natural gas cutoff, Russian President Vladimir Putin gave authority to sell the gas with its present price in the first three months of 2006, and with the increased price from then on; however, Putin said they were waiting for “a clear answer’; otherwise they would think that they were rejected and would act accordingly. Gazprom sells a cubic meter of natural gas at $50 now, but it wants to increase it to $220-230. On the other side, Ukraine says, “they will not give any more than $100.” Ukraine’s orange revolution President Viktor Yuschenko gave an “unclear” answer yesterday evening to Putin, who demanded “a clear answer”. Government Spokesman Valentin Mondrievsky said they accepted the offer; however, they need to negotiate the figures and other conditions. Yuschenko told they were ready to sit on the table; however, this did not meet the demand of the Russian side, which was waiting for a clear answer from Ukraine. There are concerns that there may be partial decreases and cutoffs in the transition of natural gas to many European countries, especially Germany, Italy and Turkey. Some EU countries demanded the flow of natural gas not be halted. Ukraine has issued a guarantee about the natural gas, which will be transferred to Europe from its own territories; however, since the related gas agreement was terminated last night, the natural gas passing from Ukraine will be in the status of “contraband good”. While EU calls the parties to act with commonsense, it is reported that former German Chancellor Gerhard Schroeder may act as an arbitrator in the settlement of the dispute. Russian’s halting natural gas flow will not immediately create fatal outcomes, because Ukraine has a stock for the next one and a half years. The natural gas crisis is also seen important due to the parliamentary elections to be held in March. The observers indicate the administrators will be in a dilemma between the “public who will get cold” and “pressure from Moscow”. There are some who think the crisis will increase the reaction of the public towards Moscow. Preparing to resort to the international arbitration for the solution, Ukraine is attempting to purchase natural gas from Turkmenistan to decrease its dependence on Russia.

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