Ukraine rejects Russia Gazprom gas price hike

[niothor]

Russia to supply gas to Ukraine on prepaid basis from June 1

http://en.itar-tass.com/economy/730982

Russia will supply natural gas to Ukraine on a prepaid basis from June 1, Energy Minister Alexander Novak said on Thursday, May 8. “May 7 was the last day when Ukraine had to pay for the gas supplied. We have not received any payment from Naftogaz of Ukraine since March of this year. Ukraine’s overall debt for gas has reached 3,508 billion U.S. dollars up to date,” he said. In accordance with Clauses 5.1.5 and 5.8 of the contract for the supply of gas made by and between Gazprom and Naftogaz of Ukraine in 2009, failure to perform the obligations entails an automatic transition to gas supplies on a prepaid basis from June 1, 2014, Novak said.

What's the latest updates on this issue?

I have said like ten times that Ukraine will do anything not to pay the entire bill.
Also I said that Russia will not cut the gas no matter what.

And it seems like it's all going like before.
Just like the threat to kick visa and mastercard out of the country.

[Nemo1024]

Part of the debt was paid, so the deadline for prepay was pushed forward in time, while still demanding that Ukaine pays the rest.
And, I think, the price was brokered by EU to be around $380 for new deliveries.

[bryant.coleman]

And, I think, the price was brokered by EU to be around $380 for new deliveries.

The last time I heard, the Kiev junta has refused to accept this new rate. They want gas at the old rate (~$280 per thousand cubic meters). Winter is still a few months away... we still have time to settle this.

[deisik]

Gas comedy theatre continues:

Ukraine in its negotiations with Russia demands that the clause prohibiting re-export of gas must be removed

But I thought Russia loved the free market? If Russia wants to micromanage who gets what and at what price, then the Ukraine should be charging additional fees to pay for the risks from the additional gas passing through its land. If another country increases its gas consumption, who will pay the maintenance costs on the Ukrainian pipelines?

Are you kidding or just not familiar with the software licenses terms in the USA (the vale of democracy free market) where reselling of software is strictly prohibited in most cases?

[bryant.coleman]

lol... this will send shock waves to Obama:

Grand Geopolitical Project: Russia’s Gazprom signs Agreement to Abandon the Dollar

http://www.globalresearch.ca/grand-geopolitical-project-russias-gazprom-signs-agreement-to-abandon-the-dollar/5386045

[deisik]

lol... this will send shock waves to Obama:

Grand Geopolitical Project: Russia’s Gazprom signs Agreement to Abandon the Dollar

http://www.globalresearch.ca/grand-geopolitical-project-russias-gazprom-signs-agreement-to-abandon-the-dollar/5386045

This is Russia's nemesis for the years of humiliation sanctions (yesterday was too early, tomorrow will be too late)...

[bryant.coleman]

lol.. so far 90% of the Gazprom clients have abandoned the USD. They will further transact using either the Euro or the Renminbi.

http://www.zerohedge.com/news/2014-06-07/90-gazprom-clients-have-de-dollarized-will-transact-euro-renminbi

Gazprom Cuts Forecast For Deliveries To Europe

http://www.rferl.org/content/gazprom-cuts-gas-europe-supply-forecast/25408215.html

[niothor]

lol.. so far 90% of the Gazprom clients have abandoned the USD. They will further transact using either the Euro or the Renminbi.

http://www.zerohedge.com/news/2014-06-07/90-gazprom-clients-have-de-dollarized-will-transact-euro-renminbi

Gazprom Cuts Forecast For Deliveries To Europe

http://www.rferl.org/content/gazprom-cuts-gas-europe-supply-forecast/25408215.html

Care to explain this then ?

ST. PETERSBURG, May 23 (RIA Novosti) – Payments under a $400 billion contract signed Wednesday between Russian gas giant Gazprom and China’s CNPC will be made in US dollars, Russian Energy Minister Alexander Novak said on the sidelines of the St. Petersburg International Economic Forum on Friday.

[bryant.coleman]

Care to explain this then ?

ST. PETERSBURG, May 23 (RIA Novosti) – Payments under a $400 billion contract signed Wednesday between Russian gas giant Gazprom and China’s CNPC will be made in US dollars, Russian Energy Minister Alexander Novak said on the sidelines of the St. Petersburg International Economic Forum on Friday.

The decision to shift to non-USD currency (in case with China, the Renminbi) was taken just two days ago. That is almost two weeks after the gas export agreement with China was signed.

[niothor]

Care to explain this then ?

ST. PETERSBURG, May 23 (RIA Novosti) – Payments under a $400 billion contract signed Wednesday between Russian gas giant Gazprom and China’s CNPC will be made in US dollars, Russian Energy Minister Alexander Novak said on the sidelines of the St. Petersburg International Economic Forum on Friday.

The decision to shift to non-USD currency (in case with China, the Renminbi) was taken just two days ago. That is almost two weeks after the gas export agreement with China was signed.

So the minister signed the deal in USD and then out of the blue a gazprom official comes out and says that 9 out of ten clients will switch from the usd payment ...not even mentioning which.

Yeah , the same with the visa / mastercard ban , they will do nothing in reality.
They do this switch from the usd each year fro the last decade.
With the ruble going lower and lower and with the profits taking a dive , that's not a good move for them and they know it.


As much as I want both Europe and Asia free of this usd deals , no it won't happen.

[deisik]

Gas comedy theatre continues:

Ukraine in its negotiations with Russia demands that the clause prohibiting re-export of gas must be removed

But I thought Russia loved the free market? If Russia wants to micromanage who gets what and at what price, then the Ukraine should be charging additional fees to pay for the risks from the additional gas passing through its land. If another country increases its gas consumption, who will pay the maintenance costs on the Ukrainian pipelines?

Are you kidding or just not familiar with the software licenses terms in the USA (the vale of democracy free market) where reselling of software is strictly prohibited in most cases?

I was being ironic, and I see what you did there. A subtle attempt to talk about a different country in a different part of the world, on an unrelated topic? Just guessing.

My bad, I didn't notice you were being ironic!

Since you did not answer anything in my post, perhaps a repeat is necessary:

If Russia wants to micromanage who gets what and at what price, then the Ukraine should be charging additional fees to pay for the risks from the additional gas passing through its land. If another country increases its gas consumption, who will pay the maintenance costs on the Ukrainian pipelines?

In fact, I wouldn't be surprised if the above, or some slight variation, is what has been happening all along, but Russia has not been honouring those costs and the Ukraine obviously can't doing anything about it apart from paying less for the gas. So they just say "Ukraine has been stealing our gas".

It seems that now I don't even get where you are aiming at... If another country increases its gas consumption, why should Gasprom (Russia) be charged additional fees or fines? As I know, Gasprom pays Ukraine the transportation costs on a per volume basis, so the maintenance costs are effectively out of the question (not Gasprom's business) since the latter are part of the former... 

[deisik]

It seems that now I don't even get where you are aiming at... If another country increases its gas consumption, why should Gasprom (Russia) be charged additional fees or fines? As I know, Gasprom pays Ukraine the transportation costs on per volume basis, so the maintenance costs are effectively out of the question (not Gasprom's business) since the latter are part of the former... 

Disputes between the two sides about how the contract should be interpreted seem quite likely. But it's all speculation unless someone has specific data on this. It would be much simpler for the Ukraine to buy all of the gas passing through and sell it themselves, that way all the costs would be easily accounted for, without Gazprom trying to cheat. Otherwise, I guess there would be endless temptation for side deals. Gazprom obviously doesn't like "side deals" because it would reduce their profits. They would be forced to supply a higher quantity of gas at a lower price.

Ukraine just has no money to pay for "all of the gas passing through it". How do you actually see this happening? Besides that, I'm very dubious that the European consumers of Gasprom would ever agree on this scheme (reasonably being afraid to end up with neither money nor gas, lol)...

[deisik]

Besides that, I'm very dubious that the European consumers of Gasprom would ever agree on this scheme (reasonably being afraid to end up with neither money nor gas, lol)...

I guess you only buy food straight from the farmer, because otherwise it might be poisoned?

Your irony is mis-aimed and analogy erroneous. I buy food and pay at the counter as I go... Ukraine can't even pay its debts for the gas it consumes, and now you suggest it buy all the gas that passes through it!

[bryant.coleman]

Yeah , the same with the visa / mastercard ban , they will do nothing in reality.

Regarding the Russian national payment system, it is already in the process of being implemented. Co-operation deals are being worked out with various banks in China and Japan as well.

[niothor]

Yeah , the same with the visa / mastercard ban , they will do nothing in reality.

Regarding the Russian national payment system, it is already in the process of being implemented. Co-operation deals are being worked out with various banks in China and Japan as well.

Yeah , and they admitted it will take them four years to build it up.
But , they backed down on their actions against visa mastercard , they will back again from their so called deals with 9 out of unknown customers.

Russia is flexing its muscles the same way the US did it in various cases , and in the end nothing happened.

[deisik]

Besides that, I'm very dubious that the European consumers of Gasprom would ever agree on this scheme (reasonably being afraid to end up with neither money nor gas, lol)...

I guess you only buy food straight from the farmer, because otherwise it might be poisoned?

Your irony is mis-aimed and analogy erroneous. I buy food and pay at the counter as I go... Ukraine can't even pay its debts for the gas it consumes, and now you suggest it buy all the gas that passes through it!

Everyone keeps saying that they are deeply in debt and can't pay. If it's really as bad the Russian government/media claim, the supply should have been switched off years ago. What sort of idiotic supplier keeps sending the goods if already know that the customer can't pay? And I guess they were "forced" to keep supplying gas because they were stupid/greedy enough to make additional deals with other customers further downstream on the the same pipeline?

Since stupidity explains everything, I suppose I should retract my earlier suggestions of malicious intent by the majority stakeholder of Gazprom, who coincidentally happens to also control the Russian army...

I have some funny questions for you, i.e. how is the U.S. government going to pay its multi-trillion debt and why does the debt keep growing?

According to your logic, everyone should have stopped financing the U.S. national debt many years ago!

[bryant.coleman]

South Stream construction is disrupted.

Bulgarian prime minister orders work to be stopped on Gazprom-led gas pipeline

http://www.brandonsun.com/business/breaking-news/bulgarian-prime-minister-orders-work-to-be-stopped-on-gazprom-led-gas-pipeline-262297421.html?thx=y

[deisik]

I have some funny questions for you, i.e. how is the U.S. government going to pay its multi-trillion debt and why does the debt keep growing?

a)Probably quite slowly.
b)Because people outside of the US keep sending their goods and services in order to get more dollars on their bank accounts. And they do that because the dollar is still the most trusted currency, sort of, and it's backed by the US' domestic economy.

Russia has been subsidizing the Ukrainian heavy industry (through cheap gas) since it is (or rather has been) very closely intertwined with the Russian industries. But with Donetsk and Lugansk regions falling off from Ukraine and Crimea (Russian navy base in Sevastopol) now part of Russia, this no longer makes sense. So now we could expect no more debts accumulating (I mean Ukrainian government debts to Russia)...

[deisik]

According to your logic, everyone should have stopped financing the U.S. national debt many years ago!

There's no comparison between the US and Ukraine. Besides, all the Ukrainian government would really need to guarantee would be the instantaneous mass of gas in the pipes, or some short-term buffer, not the entire contract!

It doesn't actually matter how this can be done from a technological point of view. You still didn't answer the question where Ukraine will get money from to buy all this volume of gas. Those with money turn out to be more inclined to pay Gasprom, not Ukraine!

I'm not Miller (nor Putin), but I think Gasprom would just be happy to sell for hard cash all its gas on the Russian-Ukrainian border and forget about its future destiny or destination...

[deisik]

Besides, why should Russia care what sort of reseller contracts the Ukraine makes?

Before bringing about the question why Russia should care what sort of reseller contracts the Ukraine makes, bring to your mind those software licenses and eula's prohibiting reselling them in America, that beacon of democracy, freedom and laissez-faire... How come?