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EU: Brussels Urges Russian-Ukrainian Gas Talks

(CTK) The European Union is pursuing a carefully neutral line in the spat over gas prices between Russia and Ukraine, refusing to blame either party. The European Commission called an emergency meeting of energy officials for 4 January, but insists there is no supply crisis. However, a number of EU countries said their gas supplies dropped by a third as a result of Russia’s now abandoned attempt to cut gas deliveries to Ukraine while maintaining transit through the country to the rest of the continent.

Brussels, 3 January 2006 (RFE/RL) -- The Russian-Ukrainian crisis has brought several responses from the European Union.

The European Commission today urged Russia and Ukraine to return to the negotatiating table in their dispute over gas prices. This came just hours before Russian and Ukrainian gas officials were reportedly due to meet later in the day to discuss their pricing dispute, which led Moscow to cut gas supplies to Ukraine.

Also in response to the crisis, the European Commission has called an emergency meeting of EU energy experts and industry representatives in Brussels on 4 January to assess the impact of the spat.

Russia’s attempt on 1 January to cut gas deliveries to Ukraine led to considerable drops in gas supplies across Europe that depend on the same pipelines. Although it accuses Ukraine of siphoning off gas, Russia has now restored gas levels in Ukrainian pipelines to nearly precrisis levels.

European Commission spokesman Johannes Laitenberger said further talks between Moscow and Kyiv are the best way of overcoming the crisis. "At this point in time the commission urges the parties to the dispute to get back to the table of negotiations," he said. "The best possible solution would of course be for the parties to the dispute to solve the conflict between themselves. If that proved not to be possible, nothing is ruled out, nothing is ruled in [in terms of EU reaction]."

Russia wants Ukraine to pay $230 per 1,000 cubic meters of gas, instead of the current $50 -- a demand that Kyiv has rejected.

Russia is demanding higher prices from other countries, too -- although Ukraine faces by far the largest cost increase. The Baltic countries will pay $120-$125 instead of the earlier $80-$90 per 1,000 cubic meters. Georgia and Armenia will see their bills nearly doubled at $110, while Azerbaijan will pay $140-$160 instead of $60. The $230-$240 the EU countries will pay also represents a price hike.

Belarus -- a loyal Russian ally -- will meanwhile only be charged $47 per 1,000 cubic meters.

Ukraine’s troubles have directly involved the EU, which receives 25 percent of its gas from Russia. Of that, 90 percent arrives through Ukraine.

After Russia cut gas levels in the Ukrainian pipelines, many countries reported significant cuts in deliveries. Countries in the east are the most dependent on Russian gas, but others also suffered. Hungary said its supplies dropped by 40 percent. Slovakia and Austria reported a more than 30 percent shortfall, while France and Italy said they were missing one-quarter.

However, the European Commission has said all EU countries have stocks of gas or have made other arrangements to tide them over disruptions lasting from a few weeks to a few months.

"The first thing that the commission did under these circumstances was to make sure that there was no immediate risk of a supply crisis for the EU. That does not seem to be the case," spokesman Laitenberger said today.

He said the EU crisis meeting on 4 January will consider a longer-term response. Analyses appearing in European newspapers suggest Russia’s credibility as a supplier has taken a blow as a result of recent events, and that the EU will go on trying to further diversify its sources. The EU produces roughly 60 percent of the gas it consumes, and apart from Russia, it imports gas from North Africa and Nigeria.

Greater use of nuclear energy -- mirroring developments in the wake of the 1973 oil crisis -- might be another response.

The European Commission was careful today not to blame either party for the crisis. This reflects the sensitivity of the issue. The EU pursues a strategic partnership with Russia that it sees -- among other things -- as an important future source of gas and oil. Meanwhile, the EU also supports the democratic aspirations of Ukraine and other former Soviet republics, and some in Russia resent the perceived loss of influence in the region.

Observers and commentators in Great Britain, Germany, France, and other EU member states have condemned what they overwhelmingly see as Russia’s attempts to use energy policy to attain political objectives.

Most also recognize Russia’s right to charge market rates for the gas it sells -- but in a commercially transparent and predictable manner.