The effect on Bulgaria, exacerbated by severe winter weather, is already noticeable. People are reporting that the drop in gas pressure is making it difficult or impossible to heat the upper storeys of many buildings. The Bulgarian government says it is already a crisis situation, and has advised its citizens to lower their thermostats. Industrial users, such as refineries and chemical plants, have been ordered to use - usually more expensive - alternatives such as oil.
State of emergency
Hungary, the Czech Republic and Slovakia have announced that their reserves are almost exhausted. Hungary has reduced gas supplies to large industrial and agricultural users to protect consumers, and the Slovak government has declared a state with emergency.
Earlier this week, the conflict between Moscow and Kiev worsened after Gazprom - Russia's state-controlled energy company - reduced supplies to Ukraine on New Year's Day. On Wednesday Russian Prime Minister Vladimir Putin ordered that supplies to neighbouring Ukraine be reduced by a third, an amount that Moscow claims is the same as that being illegally tapped off by Kiev. Apart from the accusations of theft, Gazprom claims that Ukraine has failed to pay its bills on time. A new agreement on gas prices has also not been forthcoming. Naftogaz - Ukraine's state-controlled gas company - says that now there is no gas whatsoever flowing through the pipes to Ukraine.
The current conflict bears remarkable similarities to the 2006 gas conflict between Russia and Ukraine, a situation that also had severe consequences for European countries.
Completely unacceptable
The European Commission (EC) says it is completely unacceptable that European Union countries, despite earlier reassurances from Moscow, are again the victims of a row between Russia and Ukraine.
EC spokesperson Johannes Laitenberger says the Commission and the European Union presidency, currently held by the Czech Republic, have demanded the immediate resumption of gas supplies, a return to the negotiating table and assurances that bilateral conflicts be resolved in a businesslike manner.
| The EU countries will hold talks on Friday about possible emergency measures to help those countries affected by the current dispute by supplying gas from the reserves of other EU members. Bulgarian President Georgi Padanov has already speculated that the crisis could provide a reason to reopen a controversial nuclear power station in his country, which was closed last year for safety reasons on the orders of the EU. |
Credit crisis
Whether Kiev can pay that much for its gas remains to be seen. Ukraine, along with Russia, has been hard-hit by the global credit crisis, and the country is in the grip of a long-running political dispute between pro-Western President Victor Yushchenko and pro-Kremlin Prime Minister Yulia Timoshenko. It's quite possible that Moscow will hand her the role of successful negotiator on a silver platter, something that could be a distinct advantage in the run-up to Ukraine's early parliamentary elections.
A solution to the conflict is unlikely to be far off, if only because Gazprom needs to send its gas somewhere and Ukraine happens to be the most important transit route to the rest of Europe. Hungarian energy expert Peter Torday explains:
"At a given moment, the storage depots will be full and Gazprom will have to reduce production at a time when the company normally does good business [...] The severe cold in Ukraine also means that Kiev will soon get through its gas reserves."
Alternatives
The countries of the EU get at least one quarter of the gas they need from Russia, so even after this dispute is settled they will needd to think about hou to avoid a similar crisis in the future. While Moscow argues that this conflict merely highlights that Ukraine is the problem, and that it strengthens the need for alternative pipelines - through the Baltic Sea and the Black Sea, for example - others say this is not the real answer.
Peter Tordai argues that what the rest of Europe needs to do is find real alternatives to Russia:
"Other [shipment] routes are not the answer, not while Russia remains the sole supplier."
* RNW translation (jc/tpf)
Tags: Bulgariam Putin, Czech Republic, dispute, gas, Gazprom, Russia, Slovakia , Timoshenkom Hungary, Ukraine, Yushchenko
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