Seeking Alpha

Russia tightens squeeze on Ukraine with gas price rise

  • Gazprom (OGZPY) raises gas prices for Ukraine by 44% after a discount deal expired, stepping up financial pressure on the country's government in its crisis in relations with Russia.
  • Gazprom says the increase complies with its supply contract and is necessary because Ukraine owes more than $1.7B for gas bought since early 2013.
  • The move raises fears that state-run Gazprom may threaten to cut supplies to Ukraine, which buys about half its gas from Russia, something that’s happened at least twice since 2006 because of payment disputes.
Comments (4)
  • PeakOiler
    , contributor
    Comments (298) | Send Message
     
    This implies Russia is squeezing the Ukraine deliberately. Nonsense, gas prices are rising everywhere, my gas cost here in Canada is set to rise 42% this month (Union Gas). Totally misleading headline.
    1 Apr, 08:54 AM Reply Like
  • Castrese Tipaldi
    , contributor
    Comments (45) | Send Message
     
    Just wait to see the IMF squeeze....

     

    If it will be just half bad as the 1994 IMF "help", it will be unforgettable!
    1 Apr, 10:52 AM Reply Like
  • TheJollyGreenMan
    , contributor
    Comments (74) | Send Message
     
    My view is that the Russians and Putin did not treat Ukraine, and indeed all the ex-Soviet republics, with the cold-hearted and non-compassionate way we are used to in the West. That was their mistake. Remember how in WWII the USA bankrupt the Commonwealth and the UK, insisting that they pay cash up front for the weapons to fight the Nazis. And even after they declared war on the Axis forces, after Pearl Harbour, the UK and Commonwealth had to pay for every rivet and shoelace the USA provided them.(*) The Lend-Lease was just a hire-purchase scheme Roosevelt started and the UK paid back the WWII debt only recently (2004?). The Russians made a mistake in the way they supplied the gas to their neighbours. They should have charged them the correct world price at the pumps. And then they could have arranged to pay a rebate over to the governments in the form of aid. This would have allowed three things:-

     

    1. The Russian gas producing companies would have had a higher stock market value as all the production would have been shown to be sold at proper market prices. An increased turn-over and margin on sales, good for the books of the companies.
    2. The total value of the rebate, handed to the Ukraine and ex-Soviet republics would have been properly costed, and the EU, USA, IMF would know what the value of the subsidies are and know what to expect if they want to stir trouble. It would have given Putin a big stick, the threat of the rebate cheque being withheld.
    3. The Russian banking system would have been expanded, as what I am proposing is more complicated to administer and lots of guys sitting in air-conditioned offices, tapping away at computer screens would help solve the unemployment problem and also teach them how to do international banking.

     

    (*) At one of the flying club meetings I heard a lovely story. The Canadians equipped their fighter squadrons with 14 instead of the USAAF compliment of 12 mustangs. When asked why, the Canadians countered by saying the Yanks charge too much for their spare parts and they calculated it is cheaper to buy extra planes and cannibalize them for spares.
    1 Apr, 05:25 PM Reply Like
  • dpenley
    , contributor
    Comment (1) | Send Message
     
    Who needs armies to take over countries when you can fight battles with currencies and commodities?
    3 Apr, 07:21 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector