Ukrainian PM Blames Russia for Oil Woes

forbes.com ^ | 05.14.2005, 12:02 PM | Associated Press

[Destro]

Associated Press

Ukrainian PM Blames Russia for Oil Woes

05.14.2005, 12:02 PM

Prime Minister Yulia Tymoshenko on Saturday accused Russia of suspending oil deliveries to Ukraine, and gas stations throughout this ex-Soviet republic began running out of fuel.

"Oil deliveries to Ukraine are being deliberately stopped even though all contracts have been paid for," Tymoshenko said after a Cabinet meeting Saturday.

Tymoshenko said that "for five days, no oil was pumped at all, even though we have all the necessary agreements."

The allegations are just the latest charges the Ukrainian government has lobbed against Russian oil companies, which supply 80 percent of Ukraine's fuel. Last month, Ukrainian officials accused Russian oil majors of conspiring to raise the price of gasoline and ordered a moratorium on prices, which the companies reluctantly agreed to after being threatened with court action.

Ukraine's First Deputy Prime Minister Anatoliy Kinakh criticized his Cabinet colleagues Saturday for trying to intervene and set prices, suggesting that had led to the shortage in supply.

"When you have a complicated problem to do with the growth of prices, trying to resolve it by looking for an enemy or using administrative force to put pressure on the market ... this doesn't work," said Kinakh, who is considered business' best friend in the government.

By Saturday evening, gas stations throughout Ukraine - run primarily by Russian companies - were selling gasoline only to buyers who had special coupons or customer cards. Numerous cars were being turned away after waiting in long lines, leaving drivers scrambling to find ways to keep their cars on the road.

Representatives of Russian oil companies could not be reached to comment Saturday, but Russian media quoted oil officials from Lukoil and Tatneft as saying supplies were still being pumped and TNK-BP saying it was supplying a smaller volume due to work on one of its pipelines in Ukraine.

Russian media also suggested that Ukraine had suffered problems with its own pipelines, leading to temporary shutdowns last week.

Ukraine's huge dependence on its former imperial master for fuel is a source of big concern to the new pro-Western government. Tymoshenko has said it is a priority of her government to find alternatives, and suggested that Turkmenistan, which already supplies some fuel to Ukraine, and Iran could become possible suppliers.

"With the situation now being a serious dependence on Russia, Ukraine believes it is necessary to begin studying these variants," Tymoshenko said during a meeting late Friday with a top official from France's state-owned gas company, according to her office.

Russia and Ukraine regularly tussle over energy supplies, leading to temporary disruptions. While the energy-starved Ukrainians are in a more delicate position, the Russians also depend on Ukraine as a transit point to pump their supplies to lucrative markets in the rest of Europe.

[struwwelpeter]

Dvoyniy ;-)

But, I want to know what all the fuss is about horseradish? And why would you want it on crepes with Egg foo yung?

The other day, someone on the metro said 'fuy blin hren hren hren!', I kid you not.

Serious, khuy must be the most flexible word in the Russian language, even if it isn't in the dictionary. Once in Donetsk I actually heard: "Na khuya do khuya nakhuyarili, nipezdoy dokhuya pokhuyarili." Now that's poetic.

[struwwelpeter]

BTW: I photographed that khuyovaya stolba at Babi Yar.

What went on there doesn't even rise to neolithic. Jurassic, at best.

[GSlob]

Rather, "khui v kvadrate" or "khuevyi khui"...

[struwwelpeter]

I tried to teach the kids in the dvor some English, but apparantly I wasted my time.

[struwwelpeter]

Ukrainian sign language ;-)

[lizol]

Thanks God I'm wrong, as I thought you were some nuts. If it was in Russian.

[GSlob]

While the word root is Mongolic, the usage is quintessentially Russian, as is the topic on which the thread was started. Thus we are not wrong.

[oyez]

Yeh, Looks like universal nonverbal communication.

[GarySpFc]

I only wish that more people wouldn't see people like Yushchenko and Tusmoshenko as the 'new Ukraine'. People I know in Ukraine -- and not the nationalistic Ukrainian or pro-Russian type, but moderates -- recognise that the latest government is just another case of same shit, different smell.

Do you really think that way? Shoot, I thought everyone was saying Yushchenko and Tyshchenko were the second coming...at least that is what they were saying on Free Republic. I am beginning to think someone should check out Yulia Tyshchenko's economist degrees, because she clearly doesn't seem to understand the economic problems. But then maybe there is a shortage of Russian oil because she is siphoning it off for sale in other countries.

[A. Pole]

Ukrainian officials accused Russian oil majors of conspiring to raise the price of gasoline and ordered a moratorium on prices, which the companies reluctantly agreed to after being threatened with court action.

They should buy cheaper oil from somewhere else! What about Norwegian oil - it can be transported through Poland.

[A. Pole]

Ukraine building own pipe as well ands anyway Ukraine will be main transit country for Russian resources for manyyyy years.

No way. Part will go through the Baltic pipeline (to avoid Ukrainian or Polish territory), part will go through Bulgaria and Greece (from the Black See ports) part will go to China, Korea and Japan, part will go to Iran - yes, Iran will export more if its own while supplying north from Russia. Russia has hundred ways of exporting her resources.

[GSlob]

What they need is to team with South Africans (to license sasol process) and start converting their coal into oil. It would provide welcome employment to thousands, be better than Chernobyl and free their hands strategically.

[marron]

I suspect what is happening is that Ukraine has agreements based on a lower price, which in the current climate, are way low. The Russians want to renegotiate the price based on current prices, and obviously, the Ukrainians want to keep getting oil at the agreed price.

So, the Russians agree to honor the old price, but at a reduced volume. Any oil they don't sell to Ukraine they can sell elsewhere for a lot more.

Ukraine obviously can get all the oil they want by paying the world price, but thats not the point, they wanted the lower price. They will respond, in the end, by paying the Russians full market price, and also arranging to receive oil from other suppliers, the Kazakhs and Azeris, Norway as you suggest. But they'll pay full market price.

The ex-communists in the old Soviet Bloc are all getting fast lessons in market economics. The problem is that they need to grandstand for the voting public, who don't all get it right away.

[struwwelpeter]

Now how the heck did 'yes-yes' get banned? His post 25 read:

"You are actually all wrong. It has absolutely nothing to do with the Russian. But it is actually Mongolian in reference to the Dungan people of Kyrgyzstan/China/Kazakhstan."

There's no justice. I post a bunch of nasty graffiti, but our anthropologist is banned.

Spravedlivosti net!

[jb6]

I'm sure it has nothing to do with a raise in taxs, rail duties and a massive minimal wage hike. Nope, it's always the fault of the corps when the socialists in power hike up operating expenses and the prices get passed on.

[jb6]

Yushchenko's government has increased taxes, hiked rail duties and did a massive raise on the minimal wage. Then it set a low maximum price for sales. The Russian oil companies are already talking about pulling out of Ukraine. Problem is, no one else will come in under these kinds of situations, especially when the government is busy nationalizing industry.

[jb6]

My friends in Dnepeptrovsk are furious and say that most of the city is too. Prices are sky rocketing, the bank is readjusting the exchange rate down so they're loosing money (paid in dollars). Taxes are up, the price the meat markets can charge (by government decree) for meat is lower the then cost of the meat and so the meat markets are closing, oh yeah, welcome to the new Revolution. If the first rounds didn't bankrupt you, this one will.

Wait till next winter hits. On top of that, no one is speaking out about the various opposition elected officials that have been fired or arrested or both and replaced with Yushchenko APPOINTED lackies: aka mayora of Donsk and Odessa.

My friends in Dnepeptrovsk also don't know how they'll make payroll in their small shoe factory since the minimal wage just got majorly jerked up.

Yush-Tymo Team are prime EU Trotyskites, ruining Ukraine's economy as a prerequisit for EU membership. Even Poland, with 1 year in has had its unemployment rise up by almost 2% to 19.5%.

[jb6]

Transneft deals in Ukraine, it's not nationalized. What is happening is the socialists in Ukraine have spiked up taxes, rain duties and minimal wages and then slapped the oil companies with a low set price they are allowed to sell at. The oil companies have been grumbling for a month now about abandoning Ukraine as an unprofitable market.

[Lukasz]

No way. Part will go through the Baltic pipeline (to avoid Ukrainian or Polish territory),

This is gas pipe. Europe will need more gas in future than they actually need. In effect if this pipe will be build at all (because it is not sure, costs are very high and actually there is no official support from EU, also there is question of ecology), Ukraine would lose nothing because additional gas would flow under Baltic see.

part will go through Bulgaria and Greece (from the Black See ports)

This is oil pipe, which they building because the Turks want to get rid their tankers from Tutkish straights. Then Russians will send tankers to Burgas in Bulgaria, then oil will flow to Greek port and then other tankers will take it to original destination. Conclusion is that status quo will be saved, there will be nothing more oil than already is.

part will go to China, Korea and Japan, part will go to Iran - yes, Iran will export more if its own while supplying north from Russia. Russia has hundred ways of exporting her resources.

Naturally we are talking about European markets, and obviously every pipe to Japan would avoid Ukraine. But this has nothing to do with political situation in Ukraine.

Looks like Poland and Ukraine will also build this missing pipe from Brody to Plock (oil) , I read that some European bank is ready to give us a credit.