Ukraine Suspends Gas Payments to Russia

Townhall.com ^ | April 13, 2014 | Mike Shedlock

[cripplecreek]

Will Europe subsidize it for Ukraine to keep it flowing?

[Monmouth78]

The old gas price was far below market rates, a subsidy meant to buy influence. The new price is market based. Anyone who misleads about that has zero credibility.

[wetphoenix]

Russian gas giant Gazprom earlier this month increased gas price for ~Ukrainian consumers to $485 per 1,000 cubic meters (tcm) from $268 for the first quarter, saying Kiev was no longer eligible for previous discounts.

“The question of repayment of debt is directly linked to the maintenance of gas prices at the level of the first quarter,” Kobolev told the Zerkalo Nedely weekly in an interview, referring to the original price of $268 per tcm.

“We see no reason to revise the price. We consider the price at around $500 as non-market, unjustified and unacceptable. Accordingly, we have suspended payments for the period of the price negotiations.”~

Western Europe pays around $500.
Ukraine has just rejected a trade agrement and any special ties with Russia for EU.
Why special price?

[jimbo123]

Liberal Logic:

Obama doubles American’s energy costs = Good.

Putin doubles Ukraine’s energy costs = Bad.

[1rudeboy]

I think there was a contract involved. (That being said, there’s no dispute that Russia was in fact subsidizing Ukraine’s gas imports).

[Uncle Chip]

Unless I’m mistaken there are a whole lot of gas pipelines thet go through Ukraine to Western Europe.

What’s to keep the Ukrainians from raising their transit fee or diverting some of that to their use???

[WhiskeyX]

“As for market prices, Russia can charge what it wants in my opinion. Countries can either pay or not pay.”

Actually, no, Russia does not have the authority to unilaterally hike the price of its natural gas deliveries to the Ukraine. The contracts and international laws regarding coercive and unreasonable non-market pricing of such goods prohibit such actions by Russia.

Furthermore, Russia’s acts of aggression in the Crimea and now in the other Oblasts of the Ukraine have caused a state of war to exist between Russia and the Ukraine. Consequently, the Ukraine has the right to seize and impound all Russian assets, including accounts receivable for the natural gas payments, and turn those over to a trustee to manage pending the outcome of the belligerancy and any damages payable to the Ukraine from Russia for its unlawful aggressions agianst the Ukraine. the Ukraine also has the right to make legal claims against the Russian assets in other nations in accordance with the normal international laws and customs.

[tcrlaf]

Tis cannot be good..

The Right Sector/Svoboda keep handing Russia pretexts for action.

[BenLurkin]

Contracts deserve respect.

International laws — not so much.

[tcrlaf]

“Consequently, the Ukraine has the right to seize and impound all Russian assets, including accounts receivable for the natural gas payments”

Okay, that one there is durned funny!!! Guns, jets, and artillery defeat lawyers, every single time.

You have never read Machiavelli, have you?

[1rudeboy]

LOL—as if Russia needs “pretexts.” Even if there aren’t any, it manufactures them.

[jimbo123]

Poland pays $500/tcm to Gazprom. Why should Ukraine pay $268/tcm?

[goldstategop]

What’s in it for Russia? Ukraine wants special treatment im exchange for NOT joining the Russian-led Customs Union.

Kiev is going to learn it can’t have it both ways and as a consequence, Moscow is going to shut off the gas for non-payment. Its fully within its rights to do so.

[goldstategop]

That’s an act of war. Even Kiev is not that stupid.

[WhiskeyX]

“Contracts deserve respect.”

Yet Russia does not respect them with impunity and the support of many of the people posting on FR.

“International laws — not so much.”

Without “International law” there would be no enforceable international contracts. Without “International law” Russia would have no right to exist and no right to territorial integrity of its own.

He who denies international law is authoritative is an outlaw deserving no more protection from honest and law-abiding citizens than any brigand or pirate who under international law are the enemies of all mankind.

[jimbo123]

Kerry and the EU have already said that they will pay off Ukraine’s gas arrears to Russia if Ukraine agrees to move towards paying market pricing on a planned timeline. Putin isn’t going to cut off gas. He wants Kerry and the EU to pay off Ukraine’s gas debt on a faster timeline.

[goldstategop]

And Russia extended Ukraine an unconditional loan on very favorable terms - far better than the West is going to offer Kiev.

In view of the present attitude of the Maidan regime, it makes no sense in Russia’s national interests to subsidize a hostile regime. Its not going to happen.

The West does not have the means to finance Kiev on the terms its prefers. Every one knows this.

[dfwgator]

So now the US taxpayer gets stuck with the bill.

[FreeReign]

The old gas price was far below market rates, a subsidy meant to buy influence. The new price is market based. Anyone who misleads about that has zero credibility.

You're misleading about this. You have no credibility (you're words).

Deal Struck on Gas, Black Sea Fleet - Apr. 22 2010 Russia agreed to sacrifice $40 billion in state revenues by selling cheaper gas to economically hamstrung Ukraine in exchange for a longer lease of a naval base in the Black Sea port of Sevastopol, the presidents of both countries said Wednesday.

President Dmitry Medvedev announced after a meeting with Ukrainian counterpart Viktor Yanukovych that Russia would give a 30 percent discount for most of Ukraine's gas imports. Ukraine will record the savings as an increase in Russia's lease payment for the naval base, Medvedev said.

“These issues are directly and unequivocally linked in the agreement,” Medvedev said at a news conference that the two presidents gave in Kharkiv, the biggest Ukrainian city near the Russian border.

The gas deal — a revision of the stringent gas trade contract signed with Ukraine's previous government last year — and permission for the Russian Black Sea Fleet to rent the Sevastopol base through 2042, are the first major steps toward an improvement of bilateral ties that deteriorated after former President Viktor Yushchenko swept to power in Kiev five years ago.

... The discount will apply to 30 billion cubic meters of gas sold this year and 40 bcm of gas annually until the contract expires in 2019, Gazprom said in a statement.

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