MOSCOW. (RIA Novosti political commentator Yana Yurova).
The disappearance of 7.8 billion cubic meters of natural gas that the Russian gas giant Gazprom pumped into underground gasholders in Ukraine for subsequent sale to Europe is the formal pretext for the recent deterioration in relations between Russia and Ukraine.
Exasperated, the Gazprom management demanded that Ukraine pay for the loss at the world price of $160 per 1,000 cu m and proposed conducting all future settlements in money rather than by using the current barter scheme under which Kiev received 23 billion cu m of natural gas at $50 for 1,000 cu m as a payment for the transit of gas through the Ukrainian territory. In general, the basic price even for the CIS countries is $80 per 1,000 cu m. The price for Ukraine was cut because Naftogaz, which is Gazprom's contractor in Ukraine, grants Russians a discount on natural gas transit: instead of the basic $1.75 for transporting 1,000 cu m per 100 kilometers it charges $1.09.
Now Gazprom intends to cancel the former understandings. While in Moscow for talks, Naftogaz chairman Alexei Ivchenko was told that Russian gas would cost $160 per 1,000 cu m in 2006.
The missing natural gas is not the first incident of "steeling" Russian gas in Ukraine, but the guilty party managed to get away with it in the past because Russia's demands to return the absent property were not stringent or insistent enough. On this occasion, Russia's reaction was much sharper, and sales of natural gas to Ukraine at world prices were even discussed in the Russian parliament.
The point is that Russia maintained special economic relations with Ukraine and with the other CIS countries for a long time. A free trade zone has existed in the CIS for a decade. And, in general, many economic issues between the two countries are solved on preferential terms for old time's sake. In February 2003, Russia, Belarus, Ukraine and Kazakhstan decided to establish still closer relations and approved a concept on establishing a Common Economic Space (CES), in which free movement of goods, services and funds would be provided. The idea was that the alliance would be based on 93 agreements.
At that time, Ukraine was most energetic in advocating the idea. Then Ukrainian President Leonid Kuchma insisted more than anyone else on the earliest establishment of a free trade zone as part of the CES. As a result, a High Level Group, which included negotiators from all the countries in the project, drafted a list of 29 priority measures. They included the adoption of agreements on the rules of applying tariff quotas and tariff administering, on common terms of transit across the CEA, on simplifying customs formalities and control on internal borders, and on the rules for determining the origin of goods from third countries.
It would take a brave man to talk about any equality of positions. Russia made great concessions to establish the CES. It agreed that VAT be levied in the recipient country during oil and gas export at the insistence of Ukraine, which threatened to leave the project if the measure were not adopted. Considering that Russia delivered 22 million metric tons of oil to Ukraine last year alone and that gas and liquefied condensate is also supplied there, the VAT concession should bring in $800 million a year to Ukraine's budget, whereas the Russian treasury will lose about $1 billion. Russia obviously did this for political considerations, and it looks like it miscalculated.
The first documents on establishing the CES were supposed to be signed in spring 2005. But the winter revolution in Ukraine brought new people to power with new views about their country's future and position in the world. The CES plans were called into question, at least by Kiev. The new Ukraine is not refusing to take part in the CES, but it only wants a "part-time" membership, placing its partners in an unequal position. It insists on the earliest introduction of a free trade zone and on the cancellation of limitations on sugar, alcohol, cigarettes and confectionary. Surprisingly, Russia would agree to this, but Ukraine says that the other aspects of the future alliance, such as a single customs tariff, common market of capital, services and workforce, are of no interest to it.
Naturally this position cannot but irritate Russia. It appears that in its relations with the former fraternal republics Ukraine only wants to enjoy the benefits and to avoid assuming obligations.
