The price Ukraine has to pay for Russia gas is set to treble, from $50 to $160 from the beginning of next year, reports RIA Novosti. Ukraine will now have to pay a similar rate to other European countries and – perhaps the hardest part – pay in cash.
"We want to abandon barter practices and transition to monetary payments for the supply and transportation of Russian gas [for Ukraine]," Russian Industry and Energy Minister Viktor Khristenko said. "We would like to ensure the transparency of the supply and transportation of gas and establish relations that resemble those we have had with Europe for decades."
This is going to hurt Ukraine, without a shadow of a doubt, although we shall have to watch to see exactly what an impact this has on economic growth.
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nicely (or, rather, nastily) timed to impact upon the legislative elections upcoming in Ukraine, too, at such a time as parliament (and to an extent the PM) takes most of the power previously held by the President.
Eternal friendship of Russia and Ukraine, as that ridiculous rainbow arch in Kyiv says
This is going to be nasty for Ukraine and Georgia in the short run, absolutely. But in the long run, it is a promising development. This means that the Russians really view Ukrainians and Georgians as other countries, and they are perfectly willing to drive a hard bargain with them.
Some people may think this will cause Ukraine and Georgia to knuckle under, but I think the opposite will be the case. This will encourage normalization between the governments, which is a good thing.
But Ukraine controls a section of a Russian gas pipeline to Europe. It can easily raise transit tariffs to offset the loss. In fact, I suspect both Moscow and Kyiv realize that’s exactly what’s going to happen. The net effect for both sides could be zero then.
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