With all due respect, Martin, why should Russia subsidize a resource-rich country like the Ukraine to the tune of several billions dollars per year? Not to mention the billion-dollar debt (or more) that the Ukraine has for old gas supplies? The Ukrainians have enjoyed almost free gas for many years (after accounting for the barter agreements, they really paid ~ $25 per 1000 cubic meters), and their economy is one of the most energy-inefficient imaginable. Also, they re-exported some of the gas they were getting for $50 for $230 to Western Europe. And then they insisted on knowing how Russia arrived at the price of $230 🙂
The news today is that they reached an agreement (with the Russians achieving most of their goals): Russia will sell their gas for $230, but will decrease the ratio of the Russian gas in the mix going to the Ukraine, so that the price the Ukraine pays is $95. The slack will be taken by gas from Turkmenistan, Kazakhstan, and Uzbekistan (which the Russians buy for about $40).
