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  • Ukraine does pay commercial rates for its gas, but as it is not paid in cash, but in barter for transit fees, the price it is expressed in is essentially meaningless (which suggests that the simple solution is to increase both gas prices and transit fees, to save face)


Ukraine does not pay anywhere near commercial rates for gas. Current rate for Ukraine is 50$ 1,000 cubic metres of gas and 1.09$ for the transit of the same amount per 100 km. This price is real for all intents and purposes. Say, when Ukraine steals gas from the pipeline in order to sell to Romania for 250$, 50$ is what Ukraine owes Gazprom.

Proportional inrease to 250$ gas/5$ transit will make Ukraine transit fee way above max market rates (2.5$).



  • the Ukrainian consumers already pay pretty much full rates for their gas; what is at stake is who gets that money: Ukrainian oligarchs or Russian ones. with the change in government in Ukraine, I suspect that either new Ukrainians are trying to grab a bit of the pie (and the "old Ukrainians" and the Russians are trying to keep them out) or Yuschenko is trying to clean up that business and pissing off those that used to profit. The fact that this has ascalated so much and so publicly makes me think this is plausible.


Not true; residential rates used to be around 40$, industrial around 60$ (that's why 50$ above is real). Gas bill for appartment can be around 1$ for unmetered appartments.

For Gazprom main issues are that gas and transit fees are tied and the fact that Ukraine can steal gas at any point and resell for 250$.

by blackhawk on Mon Jan 2nd, 2006 at 08:59:51 AM EST
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