by Marcus Papadopoulos
The Ukrainian government announced last week that it has insufficient funds to pay for its imports of Russian gas this winter. Naftogaz, Ukraine’s state-run energy company, requires an additional $2 billion in order to pay its $4 billion dollar debt to Gazprom – its Russian equivalent – in November.
Addressing the potentially critical situation in his country, President Viktor Yushchenko said: “Naftogaz needs another $1.6 billion to $2 billion to be able to prepare for the winter season.”
Ukraine’s announcement raises the prospect of a repeat of events from the beginning of the year when Russia cut off gas supplies to its southern neighbour following Kiev’s failure to pay for its gas on time. This had an almost immediate effect on Russian gas deliveries to the European Union as nearly 80 per cent is transited through Ukraine.
However, there is a wider picture to this unfolding situation. There are just seven months until voters in Ukraine go to the polls to elect a new president and some analysts believe the Kremlin is preparing to deliver the coup de grâce to the pro-Western government of President Yushchenko which has made joining Nato a key priority.
Current polls have the former prime minister and pro-Russian opposition leader Viktor Yanukovych ahead in the race for Ukraine’s presidency. With an economy in meltdown and nearly 70 per cent of the population opposed to Nato membership, if Moscow again cuts gas supplies to Ukraine this could help deliver the Kremlin’s man to the seat of power in the former Soviet republic.
