Russia proposes 25% gas price discount to Ukraine

Russian President Putin has offered to sell natural gas
to Ukraine at a 25% discount to the current price if the two countries are able
to agree upon a new gas deal, the pravda.com.ua news site reported on Dec. 10
from the Normandy Format summit in Paris. Gas for Ukraine “can be a lot cheaper
if we agree upon common, honest work,” Putin said, as reported by the news
site. “It can be cheaper by 25% than what the final consumer is currently
receiving, primarily the industrial consumer, because the price for gas for the
average consumer, for citizens, is subsidized. And we can’t calculate the price
from the price that is subsidized. This is common economic logic.”

Ukrainian President Zelensky succeeded in protecting
Ukraine’s interests in the natural gas sphere at the Normandy Format summit in
Paris, said on Dec. 10 Olena Zerkal, the former deputy foreign affairs minister
on Euro-integration under the Poroshenko administration. “The most positive
thing is that even an exchange of thoughts occurred regarding natural gas that
didn’t lead to any betrayal,” she said on a television broadcast. “That’s very
positive. In my view, it’s very positive that Naftogaz was able to voice to
Putin the result of the Stockholm arbitrage (proceedings), that this wasn’t a
political decision, it needs to be fulfilled, and nothing is preventing Ukraine
from demanding from Russia compensation for damages inflicted by Gazprom upon
Ukraine.” 

Ukraine and Russia succeeded in unblocking the issue
of natural gas transit, Zelensky said in his remarks to the press after the
Dec. 9 Normandy Format summit in Paris. Advisers to the presidents will discuss
opportunities, volume, prices and other details of gas transit, he said, adding
that he expects to sign an agreement “with better conditions than before,” for
a period between one and ten years. “I insisted on the maximally ambitious
conditions convenient to Ukraine and Europe of 10 years. It’s very difficult
when one side insists on one year and we insist on ten. We will find something
in the middle. We removed the issue on USD 3 mln that we won. Our position is
simple – we are ready to buy gas.”

Zenon Zawada:
Theoretically, it’s possible for Ukraine to wean itself off of its dependence
on Russian natural gas, but it would require colossal, expensive efforts on
various levels that the Zelensky administration isn’t yet capable of. In the
meantime, cheap Russian gas solves a lot of political and economic problems,
especially with so much of Ukrainian industry dependent on it. For this reason,
we believe Zelensky has little choice but to eventually warm up to Putin. We
expect him to agree – slowly, gradually and discreetly – to Putin’s demands in
various geopolitical spheres out of political logic and expedience. The job of
Zelensky’s team is to make this process as palatable as possible to the Kremlin’s
rivals, and to deal adequately with those who will protest. We think it’s
possible to postpone Euro-Atlantic integration without being forced to join the
Moscow-led Customs Union.