Between 2000 and 2001, Ukraine and Russia adopted reforms to limit gas prices that benefited the oligarchs. A contract was signed between the two countries as well as an agreement on prices. After the orange revolution, Russia and Ukraine made known their discontent with regard to the said agreement. Russia wanted to have prices similar to those of the market and Ukraine demanded better trade relations. Both demands were understandable.
However, the agreement signed on January 4 and made public by Yulia Tymoshenko brings about many doubts. The contract only covers a six-month period and fixes a price of 95 dollars per 1 000 cubic meters of gas without stipulating what the price will be in the following six months. The agreement also establishes the sale of 34 billion cubic meters when Ukraine needs an additional 21 billion. What’s not included in the contract will be bought from Turkmenistan at 50 dollars per 1 000 cubic meters during six months and at 60 dollars in the following six months. The agreement does not stipulates the cost of transportation in the Russian territory. This means Ukraine buys at a lower price than that of the market for six months but, afterwards, negotiations must be resumed.
Based on the way it’s been written, the agreement affects public company Gazprom but benefits RosUkrEnergo, a private society that, according to Yulia Tymoshenko is owned by people closed to Vladimir Putin, and Igor Seckin in particular.
Nonetheless, and taking into account the way in which it’s been written, the agreement is not bad for Ukraine. The vote of the Parliament against the Ukrainian government is, above all, a sign of changes in the alliance at its very heart.

Moscow Times (Russia)

New Players and New Stakes in a New Gas War”, by Anders Aslund, Moscow Times, January 12, 2006.