Posted on 05/13/2006 7:23:10 AM PDT by A. Pole
RUSSIA: Russia is imposing a quadruple hike in gas prices to neighbour Belarus, triggering fears of a crisis similar to the stand-off earlier this year with Ukraine.
State-owned gas giant Gazprom has told Belarus that it must pay world prices for its gas from December if it wants to continue getting supplies.
Ukraine's failure to pay a similar gas price hike on January 1st saw Russia turn off the taps, triggering a crisis that spread across much of Europe.
Critics say the demand, on one of Europe's poorest countries, is being used as leverage for Gazprom to get control of Belarus's state-owned gas pipelines.
The move is likely to sharpen anxieties in EU countries already concerned that the Kremlin may be using gas supply as an economic weapon.
The price increase for Belarus is unusual because, unlike Ukraine, its president Alexander Lukashenko is a staunch ally of Russia.
Mr Lukashenko won re-election last month in a vote condemned as fraudulent by the EU and the US, but welcomed as fair by Moscow.
Gazprom insists the demand is based on commercial reality: Belarus pays $47 for a cubic metre of gas now, compared to the European price of $230, under a subsidy contract that runs to the end of the year.
The company says that, as with Ukraine, it wants to end the practice of offering subsidies to former Soviet states to bring it into line with modern market practices.
Gazprom spokesman Sergei Kupriyanov said the demand was being made now to give Belarus time to adjust. "So that that issue of gas prices for Belarus should not become the topic of New Year's Eve television programmes, we want to agree in advance how to work next year," he told Russian television.
Belarus has made no official comment on the demand, with Mr Lukashenko a virtual recluse since his March 19th election victory. Diplomats in Moscow say that if the Belarus leader sells his distribution network to Gazprom, he is likely to be offered a fresh subsidy agreement, in part because his impoverished country cannot pay the increase.
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if Luckashencko sis not have a stroke befroe, he will now.
if Luckashencko did not have a stroke before, he will now.
It is because if makes transfer of a country from Russian sphere of influence to the Western one less lucrative.
West gets very good deal with Ukraine since Russia is stuck with the obligations to finance pro-Western anti-Russian regime to the tune of BILLIONS of dollars. So West gains and Russia pays.
But the victory in Belarus will mean huge expense and no gains for the West while saving expense (plus providing leverage in form of debt) for Russia. That way the color coded revolution might lose its steam.
Natural gas is measured in Btu or cubic feet on Western exchanges. Units are a severe problem.
What do you think about this?
bump
Didn't the Russian govt seize Gazprom and put its owner behind bars about two years ago? If so, sounds like a move by Russia's Putin.
Going from a subsidized price to a market price is always tough.
But if you are subsidized, you are inevitably at the mercy of your supplier. If you pay market prices, multiple suppliers will beat a path to your door. Alternative supplies and alternative fuels become a practical consideration.
It may not seem like it, but in the long run Gazprom is doing them a favor. Although, if Gazprom is really playing it shrewdly, they will still price themselves just under market price, just low enough to keep out the alternatives.
But, if they do, then Belarus is still getting a bargain, even if it doesn't feel like it.
Ping
Kremlin wants to control pipelines from the beginning in Siberia to the end in your home. Previously they used the energy debts (in Belarusian case subsidies) of others countries to take over their state owned companies, like refineries, power plants etc.. Now Luka wanted to give them another company but not Belarusian gas monopoly. This time Russians don’t want anything else but Beltranshaz.
Nonsense! Gazprom wants a fair market price for their gas, which currently is $230, and that is half what we pay in America.
Thanks for the correction!
BS they always want “free market price” (in fact there is no free energy market) and when pressured government give up some state owned company then they forget about “free market” stuff. Educate yourself if you want seriously discuss Belarusian affairs.
I came to terms with the more expensive Russian gas for Ukraine- no problem. I do have a problem with Ukraine subsidizing Russia by providing cheap rent for the Black Sea Fleet.
This is also my impression. Just wait until Gasprom takes over the German gas oligopoly of RWE, Eon Ruhrgas and BASF. I already know the chairman of the new consortium: A big big a**hole instead of a face that is puping extremely expensive and stinking Russian gas farts into our faces. The shaking question of this saturday evening: Do you know the new chairman too??!
I have no idea how to get out of this mess. Not only you Poles were betrayed. We German consumers have also to pay for all this BS.
Anyway I find it interesting that Gasprom is kicking Luka's a** now. The new Russian "elite" just seem to live for the new wave of materialism and the easy money that is nessecary for it. There are obviously no national values in new Russia left if they even forget about their old friend in Belarus. Nowerdays they come to the famous gambling house in Baden-Baden (not that far away from my home), spend millions and bazillions in roulette and baccara and behave like .... Not all of them, but many do. It seems to be the old story: Fortune favours fools.
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