The pressure gauge on a Ukraine gas compressor pointed to zero in Boyarka, near Kiev, after Russia cut gas supplies. (Gleb Garanich/Reuters)/(Boston.com)From EU Business:
(KIEV) - Ukraine faces further economic challenges and political disarray after striking a deal with Russia that calls for Kiev to make a fast transition to paying European prices for natural gas, experts say.
After initially balking at a relatively small increase in the gas price it pays to Russia, Ukraine backed down Sunday and Prime Minister Yulia Tymoshenko agreed to shift to full European market prices for Russian gas in 2010.
Details of the deal remain sketchy, but few doubt it will mean a significant increase in the price Ukraine pays for Russian gas, a crucial need of its important heavy-industry sector.
"The devil is in the details... (but) I fear that the conditions will be worse that those Gazprom proposed in December," said Volodymyr Saprykin, an analyst with Ukraine's Razumkov think tank.
With Ukraine accustomed to years of enjoying cheap gas, that could leave its economy reeling.
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My Comment: The days of living off cheap gas from Russia are now over. The Ukraine will now have to live with the consequences of what has happened in the past month.
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