Gas prices to grow in 2008

MOSCOW. (Igor Tomberg for RIA Novosti) – Turkmenistan announced on Friday that it would raise the gas price for Gazprom by 30%.

The Russian energy giant actually sighed with relief, as it had long expected Ashgabat to raise the prices, and $130 per 1,000 cubic meters is a moderate price for today, considerably lower than the rumored $150. In the end, the news is one more proof that Russia’s increase of gas prices for Ukraine is justified.

On the other hand, an agreement on new prices has not been signed yet. Ukrainian President Viktor Yushchenko said Ukraine was prepared to pay $160 per 1,000 cubic meters; this is not a contractual price but only a vocalized desire. The price might be $180, depending on the format and party leanings of the new Ukrainian cabinet and the board of Ukraine’s state-owned oil and gas company Naftogaz.

Prices are not the only problem in gas relations between Moscow and Kyiv. Another problem is debts, which the two sides addressed a month ago. The system of paying for Russian gas through the sole supplier of Russian gas to the country, RosUkrEnergo, which is 50% owned by Gazprom, malfunctioned because of the rapidly growing consumer debts.

RIA Novosti