Tuesday, December 20, 2005

Ukraine Raises Russia’s Black Sea Fleet Issue in Gas Row

KIEV, Ukraine -- Ukraine bared its teeth in a row with Russia over the price of its natural gas on Tuesday, making a veiled threat it might consider raising the rent on Russia’s Black Sea Fleet in Crimea, Reuters reported.

Missile launch from Russian Rocket Corvette, Sevastopol, Black Sea fleet

By introducing the Fleet issue, pro-Western President Viktor Yushchenko injected new tension into relations already strained since he came to power last year in an “Orange Revolution” of street protests defeating a pro-Kremlin candidate.

Yushchenko, critical of Russia’s demand that Ukraine pay substantially more for its gas, said it was time to apply world standards to all economic matters, including how much Russia paid to keep its Fleet in the port of Sevastopol.

The president broached the emotive issue — one that has always loomed in the background of post-Soviet relations — as Russian negotiators piled on pressure for Ukraine to pay at least four times the rate it currently pays for gas supplies.

“We are coming to an understanding that all our economic relations must be in accordance with world, European standards,” Yushchenko told a news conference, when asked about the failure to clinch a gas deal at talks in Moscow on Monday.

“Therefore, when we are talking about the economic essence of leasing Ukrainian ports and land and the temporary stationing of Russia’s Black Sea Fleet in Sevastopol, we are undoubtedly talking about a similar approach.”

Gazprom says it is time to raise the price to international levels, and it has threatened to cut supplies to Ukraine from Jan. 1 if a new deal is not signed. This could put Gazprom’s supplies to Europe at risk as most pass through Ukraine.

President Vladimir Putin says he wants to keep politics out of the row. But other officials make clear they believe former Soviet satellites now turning away from Moscow to the West should cease benefitting from perks like cheap energy.

Yushchenko denounced as irresponsible Russian gas monopoly Gazprom’s demands that Ukraine pay up to $250 for 1,000 cubic meters under what it says are European prices — compared to $50 under an existing preferential deal. Talks in Moscow on Monday between the two prime ministers failed to narrow differences.

In the mid-1990s, anguished talks on the Black Sea Fleet produced an agreement on a lease. But many Ukrainian politicians decry as too low the annual rent paid of $98 million paid by Russia for use of Sevastopol port alongside Ukraine’s navy.

Russian nationalists bristle at the very issue of Ukraine’s post-communist control of Crimea, populated by ethnic Russians but handed to Ukraine by Kremlin leader Nikita Khrushchev in 1954 when the collapse of Soviet rule was unthinkable.

Though improved in recent years, relations turned tense again after Yushchenko’s victory. He says the independence of Ukraine is linked to ensuring energy supplies and calls for all economic agreements to be based on market principles.

“All our relations — and not just with Russia — must be placed on a rational economic basis,” he told reporters. “This is a big problem and I want to resolve it honestly.”

The main issue, he said, was “not to allow a policy of double standards, not to allow a policy of reprisals about Ukraine’s democratic processes.”

And any Russian attempt to cut off supplies, as suggested by Gazprom last week, was no more than blackmail, he said.

Russian Foreign Minister Sergei Lavrov, speaking in Moscow, pledged Gazprom would meet its pledges to European consumers.

But Gazprom officials applied unrelenting pressure.

Alexander Medvedev, a Gazprom deputy head, said statements that Kiev was awaiting a Russian offer “creates the impression that there is no central mechanism for decision-making”.

“It’s not clear with whom we are to negotiate,” Medvedev said in a statement. “Our detailed proposals were sent in proper form to both the government and the Naftogaz Ukrainy company.”

Source: MosNews

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