Who Needs Additional Gas?

Ukraine's government entrusted national stock company Naftohaz Ukraina to sign a contract with Russian Gasprom for the purchase of 5 billion cubic meters of natural gas which will be consumed in the last three months of the current year, Interfax-Ukraine reports.

It turns out that the state, represented by Naftohaz Ukraina chairman Ihor Bakay cares about its citizens, who do not want to freeze in their concrete apartment buildings. The only question is, who will pay for the energy resources? Naftohaz passed endorsing the agreement on over to Ukrhazprom joint stock company, which is currently undergoing serious reorganization and does not have any money to cover the contract (as much as $200 million).

Experts pose two possibilities to the situation. Russian Gasprom may refuse to cooperate with Ukrhazprom, which is practically liquidated. However if the agreement is signed, the debt will rest in the hands of the state budget because state company Naftohaz Ukraina will be the successor of Ukrhazprom. This company is unlikely to create an effective system for collecting gas payments by the end of the year.

Then why should we carry this 5 billion gas burden? There is another explanation. According to Bakay, the Russian side has already signed the agreement. Why did they do it? Is it not an attempt to force Ukraine to pay for gas consumed during the first three months of the year, when there were no limitations? Back then, due to limitless agreements, Ukraine pumped out of the European gas pipeline almost 1.5 billion cubic tons beyond the norm, which it has yet to pay back. And as you remember, Ukrainian Prime Minister Valery Pustovoitenko promised to help Russia, which is suffering from a financial crisis. Apparently the time has come. Instead of 4 billion cubic meters (Bakay's data, reported by Interfax-Ukraine) needed to establish the balance, Ukraine is forced to buy 5 billion cubic meters.