Russia Cuts Off Gas to Ukraine In Controversy Over Pricing

In the wake of the dispute with Ukraine, some Germans are questioning the country's strategic energy policy.

"For seven years, Schroeder narrowed the German energy strategy on Russia," said a commentary in the German newspaper Die Welt. "It is now in the hands of the new federal government to secure sources of natural gas for Germany that are outside Russia. The example of Ukraine should teach caution to all of Europe."

The European Commission, the executive branch of the European Union, has called a special meeting Wednesday of its gas coordination group to discuss the Russia-Ukraine dispute.

After months of negotiations, Gazprom announced last month that it intended to raise prices for Ukraine from $50 to $230 per 35,300 cubic feet of gas -- an increase that would have a severe impact on Ukraine's economic growth. Some of the country's key industries, including steel and chemicals, are heavily dependent on gas for energy.

Ukrainian officials rejected an offer from Putin to freeze prices at 2005 levels for three months and then shift to the $230 price. The Ukrainian government wants a much slower transition to higher prices, and Yushchenko suggested a price of $80 for 2006.

Under new pricing accords, Armenia, Georgia and the Baltic states pay $110 per 35,300 cubic feet. And Belarus, an increasingly authoritarian country closely aligned with Russia, pays $47. Gazprom officials say Belarus has provided the company with a stake in the pipeline that crosses the country, allowing the company to continue to provide subsidized gas.

Ukraine has rejected any compromise based on giving Gazprom a stake in its state-owned pipeline network.

Some Ukrainian officials say they believe Russia is exploiting its energy dominance to reverse the country's drift away from Russia's sphere of influence. Yushchenko faces important parliamentary elections in March, and his opponents have seized on the energy issue.

Ukrainian officials said they have enough gas in reserve and from alternative sources to guarantee supplies through the worst of the winter. But there were suggestions Sunday that Ukraine was already siphoning.

Authorities in Poland said Sunday that they had recorded a drop in pressure at their border with the country. There were also reports on Russian television of reduced pressure at Slovakia's border with Ukraine.

"This indicates a fall in supplies originating in Ukraine and is a consequence of the decision by Russia's Gazprom to restrict deliveries of Russian gas to Ukraine," Poland's natural gas company, PGNiG, said in a statement.

But the Russian government said Ukrainian authorities were solely responsible for any reduction in natural gas supplies exiting Ukraine.

"We hope that Ukraine will fully meet its international obligations and guarantee the uninterrupted transit of natural gas intended for E.U. countries via its territory and do everything in its power to prevent any unsanctioned use of natural gas," the Russian Foreign Ministry said in a statement Sunday. "If such steps are not taken, the responsibility for any possible worsening of Russian-Ukrainian relations in the gas sector and problems caused to European countries will rest solely with Ukraine."