With Russia still threatening to cut off Ukraine’s natural gas supplies from Sunday unless it pays a lot more for it, the Ukrainian government is warning its citizens that the days of cheap energy are over.
President Viktor Yushchenko said Ukraine was now prepared to pay more for its natural gas supplies but insisted that did not mean he would accept the four-fold rise in prices that Russia is demanding. The Russian President Vladimir Putin is personally involved in the talks with Ukrainian officals over the gas. The Kremlin has offered its neighbour a loan to pay for the rise, but the Ukrainian energy minister said that was out of the question. Ukraine also knows its highly dependent on the natural gas imports.A third of its supplies come via a Russian pipeline that also supplies customers in Italy, Germany, France and Turkey. Under a long-standing deal Ukraine paid a lot less for the gas because the pipeline crossed through its territory. Gazprom, the Russian energy monopoly, says that deal is over. But there is speculation that the Kremlin is driving the tough negotiations to put Ukraine in its place. Since the “Orange Revolution” a year ago Ukraine has been strengthening its ties to the West.