Background to Blackmail
On Wednesday, December 14, 2005 Russia demanded that Ukraine pay $230 per 1000 cubic meters of gas. Prior to that, Russia argued that Ukraine would have to pay the market price of $160 per 1000 cubic meters. Clearly, the sudden and drastic increase is evidence that the price they are demanding has little to do with gas. Moreover, the price increase can not be supported with economic or practical arguments. For example, Russia is negotiating a price of $120 per 1000 cubic meters with the Baltic countries; a price of $115 for Turkey and a price of $110 for Georgia.
Recall, that during the 1990s, Ukraine was forced to pay over $80 per 1000 cubic meters while Europe at the time was only paying $67 for the same amount.
Finally, note that Belarus only pays $47 per 1000 cubic meters. Clearly, the price of gas from Moscow has a political “value added tax.”
What’s behind all of this?
1. Moscow is demanding that Gazprom be included as a member of the board of directors of Ukraine’s gas transit system. Only then, will the price increase be limited.
2. Russia is trying to reassert its dominance in the region as a reaction to Ukraine’s leading role in the newly created Commonwealth of Democratic Choice countries that includes over 10 countries from Georgia to the Baltics. Russia refused to join.
3. The economic pressure resulting from this energy row is meant to destabilize the government of Prime Minister Yekhanurov and engender a lack of confidence in his ability to negotiate energy resources for Ukraine.
This recent event is an example of a Russia despondent with the loss of empire and is attempting to regain control over Ukraine by use of economic blackmail. Analysts have suggested (primarily in “Ukrainska Pravda”) that Russia’s histrionics over gas are the result of unfounded fears that international agreements between the two countries will be renegotiated following the elections. It is argued that Gazprom will not enjoy the access they currently have to Ukraine following the elections. The markets of east and southern Europe will be dominated by American-Norwegian interests and companies.
Furthermore, Russia is concerned that its position on the Crimean peninsula will be neutralized by the presence of NATO. Russian firms may lose their monopoly over Ukraine. American companies have established some progress with oil refineries in Brody. The extension of the Odesa-Brody pipeline is moving forward. The Ukrainian government has concluded talks with Azerbaijan, Slovakia and East Europe as alternative sources of energy.
Conclusions: Gazprom – the Russian state-controlled energy company, announced it would triple the price it charges Ukraine for gas. When Ukraine tried to renegotiate a more gradual price increase, the Kremlin threatened to cut off gas supplies on January 1, 2006. Ukraine’s parliamentary elections are scheduled for March 26, 2006. Clearly, President Vladimir Putin means to trigger a crisis within Ukraine. Creating an energy crisis in Ukraine is President Putin’s way of facilitating a political crisis to bring about a pro-Kremlin government. Certain contenders for the premiership in Ukraine, like Mr. Yanukovych, will no doubt be visiting Moscow to enhance their political capital.
2. COMMUNITY ACTION: A FAX CAMPAIGN TO RUSSIAN REPRESENTATIVE
The Organization for Defense of Four Freedoms for Ukraine urges all Ukrainian American and friends of Ukraine around the world to voice their opposition to the threats and blackmail with gas prices against Ukraine. Protests should be expressed in a letter directed toward the Russian Ambassador to the United States as well as the Russian Trade representative.
In your letters, express your concern that negotiations continue in good faith and mutual respect. Also note your solidarity with Ukraine in your letters. Ukraine has already turned to countries that provided security guarantees when Ukraine unilaterally relinquished its nuclear arsenal to act as independent arbiters during this row with Russia.
We have prepared four sample letters for you use. Feel free to recompile them to fit your needs. The letters may be downloaded via our website at http://www.fourfreedoms.net. The sample letters may be addressed to the Russian Ambassador, but may also be addressed to the Russian Trade Representative. The Trade Representative has fax numbers in New York, Washington DC, and San Francisco.
Please also ask your non-Ukrainian friends to send a letter and or a fax. Be sure to include your name and address and remember to sign your letters.
Last year, people around the world stood with the people of Ukraine as they defended democracy and their right to have their votes counted. Stand with Ukraine today and defend their right to be free from fear. Tell Russia to stop the energy blackmail!
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| Letter 1 | Letter 2 | Letter 3 | Letter 4 |
