Russian President Vladimir Putin moved Russia a step further from democracy when he turned off a transcontinental gas pipeline to the Ukraine after that country refused to accept quadrupled prices. The move could throw all of Western Europe into a new energy crisis.
Photo: Reuters
The U.S. State Dept. quickly filed a protest, but it seemed to have no effect on the Russian leader's decision.
Ukrainian leaders said the cutoff came as retribution for its election of a democratic, pro-Western government in 2004 following the so-called "Orange Revolution," London's Daily Telegraph reported.
Putin sends a shiver through Europe
By Adrian Blomfield in Moscow
(Filed: 02/01/2006)
Russia took Europe to the brink of a winter energy crisis yesterday when it carried out a Cold War-style threat and halted gas deliveries to Ukraine, the main conduit for exports to the West.
With a quarter of its gas supplied by Russia, Europe is facing serious disruption and price rises for as long as the dispute rumbles on.
Moscow turned off the tap at 10am after Ukraine refused to sign a new contract with the Russian state monopoly Gazprom quadrupling prices.
Critics of the Kremlin say the rise was punishment for the Orange Revolution in 2004 which brought in a westward-leaning government that promised to remove Ukraine from the Kremlin's sphere of influence.
The American State Department said that "such an abrupt stop creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure".
The European Union has called an emergency meeting of energy ministers on Wednesday.
Britain is less vulnerable than mainland Europe because it does not receive direct supplies from the former Soviet bloc.
But as other countries seek to shore up their reserves, less gas is likely to be pumped through the pipeline that links the Continent with Britain. That could mean higher prices and, if there is no quick resolution, possible breaks in supplies.
The European Commission says that most countries have between a week and two months' emergency reserves.
Ukraine has upset Moscow by pushing to join the EU and Nato. However, Russia insists that the price rise merely brings Ukraine in line with the price that most of Europe pays: about $240 per 1,000 cubic metres.
President Vladimir Putin adopted almost warlike terms when he spoke on television as the hours ticked by before the ultimatum expired.
"If no clear response [from Kiev] follows, we will conclude that our proposal has been rejected," he said.
If Ukraine's reserves run out, it could be tempted to siphon off gas intended for other countries. It claims the right to do so in lieu of transit fees.
The cut-off coincided with Russia assuming the rotating presidency of the G8 leading industrialised nations.
In Britain, millions of families started paying higher fuel prices yesterday.
Scottish and Southern Energy raised prices by 13.6 per cent, adding approximately £50 to the average annual bill, while electricity charges will go up by 12 per cent, or about £30 a year.
Npower puts its rises into effect today, adding 14.5 per cent for gas and 13.6 per cent for electricity.
UPDATE: According to the New York Times, Russia has relented and will restore most of the natural gas flow to the Ukraine, the paper said Monday:
Russia Restores Most of Gas Flow Despite Dispute With Ukraine
By ANDREW E. KRAMER
Published: January 2, 2006
MOSCOW, Jan. 2 - The Russian gas monopoly said tonight that it would restore most of the natural gas that it withheld from a giant pipeline running through Ukraine to Western Europe.
The decision does not resolve the dispute between Russia and Ukraine over price increases for the gas, but is meant to answer European complaints that its fuel supplies were jeopardized.
Officials of the monopoly, Gazprom, said they would pump 95 million of the 125 million cubic meters of natural gas that it withheld from the flow on Sunday. As the Russians described it, this was to make up for gas that was not getting to Europe because Ukraine was siphoning off gas for itself, a charge that Ukraine officials denied. ...
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