Economics asserts itself in dispute over Russian gas

01/16/2006
In the matter of Russian gas sales to Ukraine and Europe, separating economics from politics is difficult.At the level of economics, heavy-handedness by Russia’s Gazprom can appear merely to be hard dealing in a contract dispute. Gazprom wanted to move the price to what it considers the market level. The buyer, Naftohaz Ukraiyiny, countered the prospective quadrupling of price by demanding higher fees on Russian gas crossing its territory en route to Europe.But much more is in play here.Ukraine has a pro-Western but fragile government that Moscow dislikes and that faces elections in March. Because of Russia’s historic use of subsidized oil and gas to manipulate regimes in its ...
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