Gazprom, Russia’s state-controlled energy giant has announced plans to double the price of gas for neighboring Georgia.

Russia has been having a tough time with its neighbor of late, following the Georgian arrest of four alleged Russian spies. Without a doubt, the price hike is meant to chastise the former Soviet republic for its anti-Russian attitudes. This tactic is not new — the same strategy was used in the Ukraine last winter. Since, the Ukraine, has been more aligned with Russia; this summer, the Ukranian government settled on pro-Russian Yanukovich, as its Prime Minister.

In turn, Yanukovich has negotiated a friendly gas price with Russia.

Energy as Foreign Policy

Because Russia has used its energy resources as a foreign policy tool in the past — and no one has been able to stop it, due to its great market share — European countries tried to reverse this imbalance earlier this fall. European ministers wanted European companies to have access to the Russian market and have these companies export energy back into Europe. For obvious reasons, Russia didn’t commit.


Ukraine In With Russia

October 25, 2006

Ukraine’s new PM, Victor Yanukovich, who was heavily favored by Russia in Ukraine’s presidential elections (and ultimately lost to Victor Yuschenko), has reportedly secured a deal for Russian gas exports to Ukraine. The deal was negotiated with Russian PM Mikhail Fradkov.

This year, Ukraine will pay $130 per 1000 cubic metres, a price that is lower than what most former Soviet republics will be paying Russia, Kommersant reports.

The progressive daily mentions potential political trade-offs which were denied by both parties. But it seems that no trade-off is necessary today: with Yanukovich now PM, relations with Russia are surely to improve. The PM is also notorious for his allignment with Russia, so cooperation should not surprise anyone.