Russia-Ukraine Price Dispute Driven by Political Hydra

Russia-Ukraine Price Dispute Driven by Political Hydra

The current dispute between Russia and Ukraine over 2009 gas prices marks the fourth time since the Orange Revolution that Moscow and Kiev have tried to sign a contract. Each time, the process has been trumped by a hydra of hidden agendas and political intrigues, with far-reaching implications for consumers. Gazprom prices, scaled to its customers, are pegged to a basket of oil prices with a six-month lag. Embedded in the price for Ukraine, however, are transit fees for downstream exports to Europe. When concessions are made for the transit rate, calculated per 100 km of 1,000 cubic meters of […]

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