Economics or politics: What is behind Russia's gas price rows?

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Economics or politics: What is behind Russia's gas price rows?

Economics or politics: What is behind Russia's gas price rows?
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For a year now, Moscow has been raising the pressure as far as gas is concerned. The row with Belarus is simply the latest example.It all means Russia is earning the biggest possible profits from its immense reserves. But, while pricing disputes with Ukraine and Georgia prompted claims the Kremlin was punishing those countries for strengthened ties with the West, Alexander Lukashenko’s Belarus is one of Vladimir Putin’s last close allies in the region.

Old-style strategic ties with post-Soviet republics have faded along with their old-style leaders.

When Gazprom cut supplies to Ukraine on January 1, 2006, many saw it as an act of political vengeance. Russia denied this, saying all it wanted was the market price for its gas but pro-Kremlin demonstrations outside the Ukrainian embassy in Moscow did nothing to convince the world that the motives were purely economic.

Andrei Illarionov is a former adviser to the Russian leader.

Speaking a year ago about the row with Ukraine, his explanation differs greatly from that of the Kremlin.

“These negotiations are not being conducted to eliminate subsides to Ukrainian consumers,” he declared.

He said that if this was the case, the same policy would apply to Belarus and all other gas consumers. But since it did not, he went on to explain, there must be some other aim.

Now however Belarus is involved, suggesting that economics may have more to do with this than many analysts thought.

For Russia, it is vital to keep control of fuel transit in a region where the status quo is being called into question by Turkish and Iranian projects.

Hence Gazprom’s desire to take control of 50 percent of the distribution network in Belarus. It is another bone of contention in a row that has strained the traditional friendship between these two allies to the absolute limit.