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Russia has been holding its own vast natural gas supplies over the heads of Ukraine and the European energy market at large for years now; pipeline running through Ukraine accounts for about fifteen percent of Europe’s gas supplies, not to mention around a third to a half of Ukraine’s. Putin cut off gas supplies to Ukraine most recently in 2006 and 2009 to exert just the right amount of pressure to keep Ukraine within their sphere of influence, and for the past few months, Russia has been (oh-so-generously and dispassionately) supplying them with heavily discounted gas that the Ukrainian government in turn subsidizes for their consumers to try and stave off their own major fiscal and economic problems. Not at all surprisingly, Russia’ state-controlled gas giant Gazprom announced today that they have decided to cancel that price discount, via the AP:
Gazprom chief Alexei Miller said Tuesday in televised remarks that Ukraine has accumulated a $1.5-billion debt for Russian gas supplies. He added at a meeting with Russian Prime Minister Dmitry Medvedev that Gazprom will cancel a price rebate for Ukraine starting April 1.