The government has pushed a law through parliament that purports to liberalize Ukraine’s lucrative but infamously murky natural gas market along European Union lines, the KyivPost newspaper reports. Volodymyr Omelchenko, a gas expert with Kyiv’s Razumkov think tank and a former Naftogaz insider, called the new law a positive step for Ukraine’s gas market, but questioned its adherence to European standards. “The government conveniently ignored endorsement of a July 2009 EU directive on energy market security, which warns against further encroachment by monopolistic suppliers such as Russia into the EU gas market,” Omelchenko said. The energy ministry said its law is aimed to fulfill a much earlier EU directive from 2003, when the Kremlin’s campaign to dominate its neighbor through gas exports was in its infancy. Omelchenko said the current authorities in Kyiv are divided over the desirability for Russian investment into Ukraine’s gas sector. “There is one group of influence in the government led by Prime Minister Azarov which wants more Gazprom investment, while the industrialists are against it,” he said. Russian control over the production, distribution and transit of Ukrainian gas would amount to control over Ukrainian industries that use gas, he added. The most immediate and obvious problem with the government’s new draft law, however, is that it continues to allow the authorities to sell gas at below-market prices for political gain. Omelchenko said state subsidies to industry total anywhere from $1 billion to $1.5 billion a year, although figures are no longer published by the government. “Particularly favored oligarchs don’t pay anything at all” for some of the gas they obtain through murky schemes, he added. Under current opposition leader Yulia Tymoshenko, who headed the government until losing her presidential bid to Yanukovych earlier this year, the situation was little different, Omelchenko said. “Subsidies are a great way to get political support,” he added. |
