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40 comments on Ukraine-Russia gas spat: some background and context
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40 comments on Ukraine-Russia gas spat: some background and context
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GAIA Host Collective
Ukraine imports ~30 billion cu. m per year from Russia and it buys about 36 billion cu. m per year from Turkmenistan.
The old price was $179/1000 cu. m. Gazprom's new 'European' price is $400/1000 cu. m( evidently a Russian gift for Ukrainian EU membership); $400-$170 per 1000 cu m. x 30 billion cu. m = $6.9 billion dollars a year>>$1.5-2 billion 'owed'. If the 'compromise' price is $250/1000 cu. m
then $250-$170 per 1000 cu m. x 30 bcm= $2.7 billion/yr still quite a bit larger than $1.5-2 billion dollars to settle the books.
http://news.bbc.co.uk/2/hi/europe/4578350.stm
It still looks like Kremlin-style punishment.
Russia could propose a fair, impartial arbitration but energy-mad Czar Putin will never submit to that!
Nyet!
The imports from Turkmenistan are a fiction: that gas has to go through Russia and that can only happen with the consent of top Gazprom officials and top Russian political executives.
Don't forget that you never know, of all the figures that circulate, which ones are gross and which ones are net of transit fees. Note that this matters for Gazprom's own tax bill within Russia and it is not necessarily in their interest to inflate the number. Also, it's not clear which part if the official deliveries to Naftogaz and which bit goes directly via intermediaries.
majorian said:
> Russia could propose a fair, impartial arbitration but energy-mad Czar Putin will never submit to
> that! Nyet!
I thought that the free market was the "fair and impartial arbiter". You know, in the west someone who sells something gets to set the price and people can either accept that price or shop elsewhere. Or do you walk into Walmart, look at the prices, and demand "fair and impartial" arbitration if you don't like the posted prices?
For goodness sakes, the market price is $400, Russia is offering to sell it to the Ukrainians for $250, and the western media - which not so long ago was calling on Russia to ditch socialism and embrace capitalism - is crying about how unfair Russia is being.
Good thing we are genuinely committed to the principles we espouse. Just kidding.
400 USD works out to about 28 EUR/MWh (EUR/USD x 400 / 10.4 kwh/cm)
current market prices for cal09 and 10 for western europe is 22-23 eur/mwh
400 would seem to me to be well above market.