Higher gas prices to squeeze Ukraine

Ukraine may be the big loser from a decision by Kazakhstan, Turkmenistan and Uzbekistan to increase gas prices to European-level prices from 2009. Gazprom buys natural gas from Central Asian republics and re-sells it to Europe through its own pipelines.

The increases were announced on Tuesday after a a meeting between gas officials from the three nations and Gazprom CEO Aleksey Miller.

The increase is likely to have serious effects, particularly on Ukraine, which currently buys Central Asian gas at just $US 180 per thousand cubic meters.

A disagreement over the country’s gas debt to Gazprom inflamed a weeks-long row between the two earlier this year.

Gazprom currently charges Ukraine a designated European price of $US 315 per thousand cubic metres.