Dear Ukrainians, Your Gas Bill Goes Up By 50% On May 1, Have A Nice Day

Tyler Durden's picture

We assume this is not what President Obama meant when he said "costs"...

  • *UKRAINE TO RAISE GAS PRICES FOR HOUSEHOLDS 50% FROM MAY 1
  • *UKRAINE TO RAISE GAS PRICE FOR HEATING UTILITIES 40% FROM JULY

As we warned previously, "the honeymoon is over" and it seems, from today's address, President Obama is about to mandate who and where the free market for natgas delivers it supply.

Of course, this is not about to get better anytime soon:

  • *NAFTOGAZ UKRAINY SAYS GAS DEBT TO GAZPROM IS $1.7B: KOBOLYEV

But President Obama is disappointed in the free market.

“We’ve already licensed, authorized the export of as much natural gas each day as Europe uses each day; but it’s going into the open market; it’s not targeted directly,” President Obama says.

 

It’s going through private companies who get these licenses and they make decisions on the world market about where that energy is going to be sold,” Obama says at news conference in Brussels

Time for another executive order? We suspect a 50% gas price hike may just be another tipping point...(as we noted before)

What is certain, is that the struggling population, most of whom never wanted the recent political overhaul and were quite happy with life as it was, will suddenly demand a return to the living standards under the old, if "horrible" regime, and demand an even quicker overhaul of the current administration.

Something Putin knows all too well.

Why does he know it? Because current events are a carbon copy of what happened in 2007 that led to the infamous 2008 Ukrainian political crisis.

What happened in 2007? This:

Ukraine agreed to pay close to $180 for every thousand cubic meters of natural gas it gets next year from Russia, Russia's state-run gas monopoly said, marking a nearly 40% increase over current prices.

 

The deal, which comes after months of negotiations between Moscow and Kiev, is part of what Russia describes as an effort to stop giving energy supplies to former Soviet republics at cut-rate prices.

 

That effort escalated into a full-blown dispute two years ago, when Russia cut supplies to Ukraine. The dispute affected some European countries, raising concerns about Russia's reliability as Europe's main energy supplier.

 

OAO Gazprom said Ukraine agreed in a deal signed by Ukrainian Energy Minister Yury Boiko to pay $179.50 for every thousand cubic meters it buys from Russia next year. Gazprom said transit prices would be set at $1.70, the price for gas shipping across Russia.

 

Ukraine currently pays $130 for every thousand cubic meters of gas from Russia.

 

In October, Russia urged Ukraine to make good on what it said was a $1.3 billion debt for gas shipments, a demand described by some Ukrainian officials as an effort to influence Ukrainian politics after September's parliamentary elections.

 

The deal comes a week after Gazprom said it would pay as much as 50% more next year for natural gas from Turkmenistan. Russia controls nearly all gas exports from the Central Asian nation.

Funny how history not only rhymes, but sometimes repeats itself. Verbatim.