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"...


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:


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.

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1000yrdstare's picture

Who runs Barter town?

SWRichmond's picture

A better question is, who benefits from higher energy prices worldwide?

eclectic syncretist's picture

Is this another one of Obama's sanctions? 

MillionDollarBonus_'s picture

Ukrain needs to start moving away from fossil fuels anyway - hopefully this will accelerate the process. This is a great opportunity for the Ukrainian government to invest in green technologies; not only will this help solve the global energy crisis - it'll also create jobs and support the economy.

Independent's picture

LOL Green, the only thing green is their grasslands, they have no reliable windpower, or hydroelectric dam potential, no geothermal, and they are not as sunny as Spain.

RealityCheque's picture

I hear paper money makes great heat. In a pinch...

Chupacabra-322's picture

Blackwater works for whomever pays the most, the banksters on Wall Street who funded this "revolt". Now these peddlers of democracy are trying to silence those who don't agree with the ones who took power in Kiev. It is interesting to note, the extreme right wing who helped, or most likely were duped into making the revolt possible is now being taken out by the unelected US, IMF imposed puppet in charge, Yatsenyuk. So much for democracy,

Putin will not have to do anything at all, as those in charge who are following the flawed policy of the clueless US state department will surely spark a civil war. It is also noteworthy that the right wing candidate who is planning to run for the Presidency of Ukraine and his supporters, want nothing to do with the EU, NATO or Russia for that matter, which most likely reflects the real sentiment of most Ukrainians. Since the days of the Kozaks, Ukrainians have always sought to be independent of anyone. Neutrality, a non-aligned policy and real independence would have prevented the annexation of Crimea, preserved peace and the territorial integrity of Ukraine. The foisting of Yatsenyuk, one of the most unpopular politicians upon Ukrainians by the EU/US/IMF cabal is sure to result in discord and the possibility of more violence in Ukraine. The question is, as these mercenaries start assassinating anti Kiev leaders and citizens, will Russia just stand by?

Ifigenia's picture

"Blackwater works for whomever pays the most, the banksters on Wall Street who funded this "revolt". Now these peddlers of democracy are trying to silence those who don't agree with the ones who took power in Kiev. It is interesting to note, the extreme right wing who helped, or most likely were duped into making the revolt possible is now being taken out by the unelected US, IMF imposed puppet in charge, Yatsenyuk."

The extreme right, Right Sector, thrust the jews now they pay the price.

studfinder's picture

I've noticed that the sunflower oil sold at both WalMart and Trader Joes is from the Ukraine.   Pretty good stuff, although strong if you are use to refined (not cold pressed)...  Ukraine does have one thing that everyone needs and that is fertile farmland, not that Russia doesn't have a ton of that too...

usednabused's picture

LMAO at MDB. He's gotta be the stupidest fucker yet....

usednabused's picture

LMAO at MDB. He's gotta be the stupidest fucker yet....

semperfi's picture

they can use aborted fetuses - American women can provide about 1,500,000 per year

donsluck's picture

Check out Freakonomics (the book). The unprecedented drop in the US crime rate in the late '80s and '90s can be linked to the legalization of abortion 20 years earlier. Amazing when unwanted children are aborted, the overall society benefits. In the last 15 years, however, abortion has become much less available and out-of-fashion. I suggest talking to a grade school teacher about the quality of family life (and student problems) today.

Zymurguy's picture

A factual link agreed upon by whom?  The authors?


"abortion has become much less available and out-of-fashion"


Hey keep piling it on.  I hear Obama may need a new spokesperson soon, you're pretty good.

Anusocracy's picture

Aborting the offspring of those who have low cerebral control is a good thing.

Hunter-gatherer mothers would inspect their newborns and kill it if it were physically malformed.

Abortion promotes that for mentally malformed.

CH1's picture

Homeschool for the win.

Greenskeeper_Carl's picture

pretty sure thats been debunked. But even if it hasn't, I still cannot condone the killing of an unborn child for no reason(not talking about cases of rape, etc). Take responsibility for your actions. I say this as a 'devout' athiest. I believe it is also unconstitutional, since each person is supposed to be entitled to life, liberty, and the pursuit of happiness. I have seen my 12 week gestation son moving around on an ultrasound, and heard his heartbeat. No matter how much those on the left like to pretend otherwise, that is a tiny person in there people are deciding to kill, usually for no other reason than to avoid taking responsibility for the choices they made. whatever problems society has, they won't be solved by choosing to end the ives of our unborn children

amberwavesofsomething's picture

For what its worth, Rothbard had a pretty interesting argument for abortion. Was not pretty, and even most die hard Libertarians couldnt really stomach it, but it was in line with his overall philosophy.

Anusocracy's picture

Embryo comparisons:

A 'human' is an animal until it has shown it is not an animal.

Most killing thieving enslaving destroying 'humans' are still animals.

Totentänzerlied's picture

LOL and that is supposed to matter precisely how?

Economic reality trumps everything except biology, physics, and thermodynamics.

Keep the kid, create another hopeless cradle-to-grave welfare dependent basket case with a parent (yes just one parent) who doesnt want him/her and has no time for him/her and can't properly care for or raise him/her by any remotely sane definition of "properly", who has no prospects for advancement except by becoming another serial debtor, that is exactly what every healthy society needs, unwanted, unloved, unnecessary, children it is no way able to accomodate.

Here's the real litmus test: how about you volunteer to pay for all these kids, from age 0 to 16 (I hope you're a mutlimillionaire)? No, doesn't sound like such a great idea now, now does it?

teslaberry's picture

any talk of 'abortion debate' should be grounds for having your entire screename banned from zh. 


Keyser's picture

With 7+ billion souls on the planet, someone needs to start making decisions on procreation, even though it is a morally reprehensible topic. 

Totentänzerlied's picture

Trying to argue factually with mental cave-dwellers, gets no one anywhere.

"Amazing when unwanted children are aborted, the overall society benefits."

Any anthropologist or ethnologist could tell you that, and they have a million years of direct supporting evidence from every human society that has ever existed. Selective infanticide is older than Homo sapiens. And yet here we are today still arguing this point with deluded fools.

Here's another boring and factual third-rail taboo: The fastest, easiest way to increase labor power is to decimate the working population, because demand is relatively inelastic. The converse is true too: rapid population growth destroys the value of labor. For bonus points: figure out how this historical fact is directly related to the rise of capitalism and the credit economy.

Pesky Labrador's picture

fossil fuels, hehe

Dinasours didn't make oil, its a natural by product that the earth produces.

tony wilson's picture

hey milliondollar bonus why not suggest to soros a cabbage powered power stations.

nice and green

unless it's a red cabbage

teslaberry's picture

you want funny sarcasm, there was a clean coal article on wired magazine of all places. 


yea, just read the comments section. you laugh at their stupidity. but I cry when i realize a generation of fools dominates our current discourse. a generation of brainwashed morons many of whom have gone to college. 


I think this is the first generation of human beings having received higher education---and the end result is they have LESS ability for critical thinking as a direct result of higher education relative to those 'less educated' than themselves. 


As a person who has been in top 10 law and business schools and colleges. I've come to believe that the indoctrination in them has achieved a level to actually dumb them into thinking they are smarter for not questioning the ivy line. 

this is what it means to have a detached elite. a generation of 'rich' sheep many of whom will themselves be scalped by those who are more aggresive , clever, or connected than themselves. 


'coal is bad' . please. you couldnt' get thse people to use their brain if you hit them over the head with a giant lump of coal. 

Keyser's picture

One can find uninformed and ignorant people everywhere. I find this genuinely odd considering the fact that researching a topic has never been easier. 


ParkAveFlasher's picture

Obama is such a bleeding con or dope.  He loves higher energy prices because higher prices in the US mean a higher tax basis for his government.  DC hates cheap oil.  DC hates cheap anything.  Cheap anything means low demand for debt, which is the only product that DC trafficks in .

Greenskeeper_Carl's picture

debt is also just about the only thing we export, in the form of FRNs

john39's picture

how long until western ukranians ask for a referednum to join Russia?    what does the EU possibly have to offer Ukranians? LGBT rights? the situation is a joke.

Vampyroteuthis infernalis's picture

Russian doesn't want Western Ukraine, the motherland wants the eastern portion. 3, 2, 1 to further succession from Ukraine in the east. 

Omen IV's picture

Western Ukraine is a fascist cesspool - even if offered Russia wont take it - let it merge with Poland and the EU - and take the debt with it

the east will have a referendum or a revolution by the end of summer to bolt to Russia - 36 months from now - Obama will have nothing to show for his Putch but chaos in the west and calm waters in the eastern Ukraine

the article today on Al Queda / Syria in the NYT today  is parallel case of results of US interference - all chaos and more militant groups exploited by USA looking to create instability


therover's picture

Creating instability is the main goal. Not democracy, not fairness, not ecomomics. It all comes down to creating instability in regions in order to exploit ANYTHING.



BlindMonkey's picture

Creative.  I think you nailed it.  Let's modify Rothchild's maxim to add that if no blood in the streets exists to create a buying opportunity, the smart money creates the blood in the streets.

walküre's picture

Nobody ever asks for a referendum to "join" Russia Referendum asks you to say "yes" or forever hold your breath.

The discount expired anyway. Russia didn't want to sell at 40% discount, why would they? Russian state is near bankrupt - again. They need every penny they can get their hands on. Russia's demographics are a dark black hole. No kids. Anyone stupid enough to have kids in Russia trains the kids to leave when they're old enough to start their lives and careers in either Europe or North America. There are no immigrants from Europe or North America lining up to enter Russia. Russia is a dead man walking. Has been such for a thousand years. Russians soul is sad and heavy. Only Vodka can bring short term peace.

johny2's picture

brighten up! as per your own words for 1000 years they have been a dead man waking, and still they are pretty much alive. 

bankruptcy is only possible if you load up on debt and than get cut off from the credit. at least 2000 years old practice.

walküre's picture

They're barely alive and again, Russians that have the means will always send their kids out of the country and probably relocate themselves. Russian expats don't consider themselves part of Putinistan.

johny2's picture

russia has been running a surplus for quite a while now, and they have even saved some money ( even if they choose to hold their savings in us paper, showing a lot of trust in my opinion )

talking on behalf of the russian expats is quite a tall order for me, I am supposed to trust you know most of them?

if the present scheme survives in the same form, expect ukraine debt to rise tenfold, and the whole industry to be in property of the certain parties, and the residential properties under mortgage.

for blueprint on ukraines IMF/CIA planned present and possible future, read on wiki "the economy of yugoslavia", years 90 onward.  


CrashisOptimistic's picture

from the article:

"Why does he know it? Because current events are a carbon copy of what happened in 2007:

They are not a copy of 2007.  There is a difference.  The IMF.


The upcoming price hikes will be FAR more than specified so far.

1) Russia/GAZPROM agreed to a price cut from the European norm in December as part of the deal of Ukraine joining the Russian economic bloc.  The Ukraine has broken that deal and will lose that price cut.

2) The IMF, as it has done elsewhere, has demanded that govt subsidies on oil and gas be stopped.  No cushioning the price of citizens.  They will have to pay the full amount.  The IMF has done that because the gov't expenses in this are so high (and to stop encouraging more consumption that results from the lower prices).  So this will be about 40% and is what the article is referring to.

But the GAZPROM increase will be 80%.  The sum, 120%.

walküre's picture

GAZPROM is in the business of selling GAS. If the price of gas is too high, they will sell less gas as consumption and demand gets lowered. Lower volume, higher prices and their net income will be the same. Unless Ukraine either produces more gas themselves or venture into alternative energies. There are options and the pancake has always two sides.


angel_of_joy's picture

Russia is a dead man walking. Has been such for a thousand years. Russians soul is sad and heavy. Only Vodka can bring short term peace.

If this passes for "strategic thinking" nowadays in Germany (and EU ), there is no wonder that you guys are in such a miserable shape. As for Russians, for a 1000 years old "dead man walking" they're not doing too badly...

tempo's picture

US frac gas is a joke. Very capital intensive, 30%/yr decline rates and high abandonment costs. Frac gas are the leftovers. Exporting LNG to bankrupt countries in the EU would only be supported by Obama. Ukraine, wake up, make friends with your powerful neighbor, stop listening to the meaningless speeches from the US about help. We are bankrupt and corrupt.

crazzziecanuck's picture

Ukrainians have to stop dwelling on the past, actually.  Yanukovich was straddling both the EU and Russia and playing both rather well, kleptocrat or not.

Now that the "Ukrainian" nationalists have decided to snub Russia in favour of the EU, they're going to discover hard truths.  About half of the French polled said they want France to leave the EU (not just the Euro), so you have a situation where you have one group banging on the door screaming "let us in" while the French (and others like Greece) are on the other side banging and screaming "let us out."

Like I was always told, be very careful what you wish for.

KickIce's picture

Anymore it's like having connecting rooms in Hotel California with a lion in one room and a tiger in the other.

Independent's picture

Sure isn't the natives.  I was just reading that the Vampire Squid, aka Goldman Sachs is making a killing off of speculating on food commodities and also buying up farmland.  Guess Ukraine is the next fertile ground for that money making scheme.

sessinpo's picture

Independent       I was just reading that the Vampire Squid, aka Goldman Sachs is making a killing off of speculating on food commodities and also buying up farmland.


It's easy for them to make money (using depositors and tax payer money). They can speculate with ease because they buy the production as well as the transportation. Can we say manipulation and corruption.

Freddie's picture

The Troika has spoken.  Prepare to live like the Greeks.  Thank the dual citizens.

I woke up's picture

It's the "free" markets fault

101 years and counting's picture

in other words, get ready Amerikka for a big spike on your nat gas bills.  we not only supply europe with gasoline and diesel (because of sanctions on Iran), we will now send as much nat gas to europe as needed.  higher energy prices = inflation = good = wet panties for yellen.  add in the CA drought and higher food prices, and there is a pool under her.