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Russian Gas Monopoly To Double Price Of Gas For Georgia Amid Politic

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  • Russian Gas Monopoly To Double Price Of Gas For Georgia Amid Politic

    RUSSIAN GAS MONOPOLY TO DOUBLE PRICE OF GAS FOR GEORGIA AMID POLITICAL TENSIONS

    China Post, Taiwan
    Nov 2 2006

    Russia's state-controlled natural gas monopoly OAO Gazprom said
    Thursday it would more than double the gas price for neighboring
    Georgia.

    The announcement signals Moscow's continuing recalcitrant stance in its
    conflict with its small ex-Soviet neighbor even as Georgia's foreign
    minister is visiting Moscow in the hope of easing spiraling tensions.

    Gazprom _ which has been criticized in the past as a tool of Kremlin
    policy _ said in a statement it plans to charge Tbilisi US$230
    (€180) per 1,000 cubic meters of gas, compared with the US$110
    (€86) that it pays now.

    The statement came as Georgia's Foreign Minister Gela Bezhuashvili
    visited Moscow in a bid to defuse tensions that peaked after Georgia
    briefly detained four purported Russian spies in late September.

    Moscow responded with a sweeping transport and postal blockade on
    Georgia and a crackdown on Georgian migrants living in Russia.

    Relations between Moscow and Tbilisi have steadily deteriorated
    since the 2004 election of Georgian President Mikhail Saakashvili,
    who has sought to take the Caucasus nation out of the Russian orbit,
    bolster ties with the West and join NATO in 2008 _ a course that has
    angered Moscow.

    Moscow has shrugged off Western calls for lifting the sanctions
    against Georgia, saying it was acting because the Georgian government
    is plotting to bring its breakaway provinces of Abkhazia and South
    Ossetia back into the fold by force _ allegations Georgia denies.

    Gazprom has consistently argued that price increases for former
    Soviet neighbors are a long-overdue recalibration toward market
    pricing. However, they have been widely seen in the West as part of
    the Kremlin's attempts to put pressure on ex-Soviet neighbors.

    Gazprom temporarily switched off the gas it supplies to Ukraine at the
    start of the year after Kiev refused to accept an abrupt price hike
    that was seen as a calculated blow to its Western-leaning government.

    Since the appointment of Kremlin-friendly Prime Minister Viktor
    Yanukovych, however, Ukraine has been able to negotiate a much more
    gentle price rise for 2007.

    Any dispute leading to cuts for Georgia could hit the nation's
    struggling economy hard. Tbilisi already was left freezing for a week
    early this year after a pipeline explosion in southern Russia cut
    supplies. Saakashvili blamed Moscow for the interruption, charges
    Russian officials angrily denied.

    Cuts would also deal a blow to Georgia's landlocked neighbor, Armenia,
    which receives its gas from Russia via Georgia. Armenian businesses
    already have been forced to organize costly new export routes to
    Russia due to the transport blockade.
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