NPR logo

Russia Vows To Cut Ukraine Gas Supplies

  • Download
  • <iframe src="https://www.npr.org/player/embed/98912425/98913352" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Russia Vows To Cut Ukraine Gas Supplies

World

Russia Vows To Cut Ukraine Gas Supplies

Russia Vows To Cut Ukraine Gas Supplies

  • Download
  • <iframe src="https://www.npr.org/player/embed/98912425/98913352" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

As New Year's Day draws near, so do worries about another energy crisis in Europe.

Russia says it will suspend natural gas supplies to Ukraine Thursday in a dispute over prices.

Most of the gas Russia supplies to Europe also goes through Ukraine. Both sides promise European supplies will be left untouched, but that's not what happened the last time Moscow and Kiev had a falling out.

When Russia's state monopoly, Gazprom, cut supplies to Kiev in 2006, the move caused temporary disruptions of deliveries to Europe. That prompted fears of an energy crisis during a bitterly cold winter.

Now, for the fourth year in a row, Russia and Ukraine are locked in a dispute. Gazprom says Ukraine must pay a $2 billion debt and pay much more for gas next year — or face a shutoff Thursday morning.

The two sides are still talking, but the atmosphere appears more hostile than in previous years.

'Blackmail'

Wednesday, Gazprom's export chief, Alexander Medvedev, accused the Ukrainians of planning to confiscate gas destined for Europe.

"Such a move can only be called blackmail," Medvedev said, "of Russia, Gazprom and Western Europe."

Europe gets a quarter of its gas from Russia. Even though Kiev says it will guarantee the 80 percent that passes through Ukraine, European countries are watching events nervously.

The Ukrainians say they've paid the debt they owed Gazprom. But now the price of gas for 2009 is the big issue. At one point, Russia was talking about doubling the rate.

Last week, Ukrainian President Victor Yushchenko said Russia's dramatic price hikes are unacceptable.

Making Life Difficult For Kiev

But Russia's response has been to step up its attacks on the Ukrainian leadership. Russian President Dmitri Medvedev said the failure of Ukraine to pay its debts showed the impotence of the government in Kiev.

"It's embarrassing to watch," Medvedev said — and he warned of unspecified sanctions from Moscow.

The dispute is about much more than the price of gas. Russia insists it's charging a fair market rate, but most analysts believe Moscow is using its control of vast energy supplies as a political weapon against Ukraine, a pro-western former Soviet country on its border.

"Since Ukraine's Orange Revolution four years ago, Moscow has done everything it can to make life more difficult for Kiev," said Andrei Illarionov, who used to be chief economic adviser to then-President Vladimir Putin. "We've seen the same kinds of policies carried out against Georgia, although thankfully in Ukraine's case it hasn't yet led to war."

Gazprom is desperate for cash after losing billions of dollars in the global financial crisis. But Ukraine has been hit even harder than Russia and has already faced power cuts. Energy experts say Kiev would be very hard pressed to come up with more cash for its Russian gas bill.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.