So "commercial" terms would mean oil-indexed prices for the gas, and "what the market will bear" for transit fees. Ukraine, having absolute control over Russian exports, can capture the rent and set whatever transit price it wants. The current status quo (25 bcm/y of gas vs transit rights) is a great deal for Russia - this is not what this dispute is about. In the long run, we're all dead. John Maynard Keynes
every time Ukraine steals gas, that is the amount Gazprom gets back; current ratio is tilted into Ukraine's favour; Gazprom transit fees for Turkmen gas can be made the same as Ukraine's fees for Gazprom gas; that is the amount Ukraine will pay for the gas in the first quater of 2006 and after 2007, when Turkmen gas is being bought by Gazprom.
Ukraine can not charge whatever it wants for the transit (well, no more than Russia can charge for the gas, being the only supplier), and one of the reasons being that Turkmen gas goes through Russian pipeline.
As for the price, Gazprom is talking about 12 bcm/y, so it does not seem to think that the price is great.
(Obviously, there is gas physically coming from Turkmenistan, but it is bought dirt cheap as Turkmenistan has no other option - the Turkmenbashi doesn't care as he is part of this scam, obviously, and has few people he needs to share with) In the long run, we're all dead. John Maynard Keynes
The only way to "capture value" is to buy for 50$ and resell for 250$ and this done by Naftogaz/Ukraine.
Gazprom suggest market rate which will make this impossible, Yushenko tries to keep this arrangement.
And a $1.5 billion difference, which an above comment (written by you, I believe) argued the Ukrainians should just pay, may not sound like a lot of money, if you live in the US, Western Europe or Russia, but, when your GDP is only about $300 billion, it's a lot of money. It's easy to advocate coughing up the money when your country has it or can easily afford to borrow it.
The entire issue seems to be more political than economic. Former Soviet Republics who have agreed to play nice with Moscow are getting gas for less than half the price being demanded from Ukraine -- even less than the former rate in Ukraine for Belarus. You're seriously arguing that this has nothing to do with politics? Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
The fact that Ukraine is poor (real or perceived) does not mean it can steal whatever gas it wants.
Russia's government already offered a loan, which was rejected. Gazprom also offered lower gas prices for the share in gas pipelines and Ukraine was not interested. So the problem is not with money.
Belarus never had problems with theft, and Gazprom has a share in pipeline. From Gazprom point of view, low gas prices is a payment for the pipeline ownership.
