Much of Ukraine’s industry runs on imported natural gas supplies from Russia and Moscow is threatening to cut off supplies from January 1 unless it accepts a four fold hike in gas prices. Ukraine has refused. In a growing war of words, it has warned the Russian navy hiring a Black Sea port from Kiev that its rent will be increased in return. Looking for a way out of the crisis, Ukraine’s energy minister Ivan Platchkov has been in Moscow.
Some observers believe the Kremlin is using the gas issue to put pressure on its neighbour to toe the line. Since the “Orange Revolution” a year ago, Ukraine has been strengthening its ties to the West. The Russian energy giant Gazprom which supplies Ukraine with the gas says until now it has been charging its neighbour well below market rates – especially compared to what countries in western Europe pay. Gazprom alone provides Ukraine with a third of its natural gas needs.