Europe low on fuel without Russian gas

Stephen Beard Jan 6, 2009
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Europe low on fuel without Russian gas

Stephen Beard Jan 6, 2009
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Kai Ryssdal: It’s not unusual to squabble over the natural gas bill this time of year. Somebody turns the thermostat up, somebody else turns it down trying to save a couple of pennies, like in my house.

But not many disputes end up with a whole country declaring a state of emergency and several others warning of major fuel shortages. The disagreement in question is between Russia and Ukraine. The two have been wrangling for years over the price of natural gas, and over an unpaid bill. Marketplace’s Stephen Beard reports from the European Desk in London that a large part of Europe is now feeling the draft.


Stephen Beard: Bulgaria has been hit the worst, and could run out of natural gas within days. Romania, Poland, Hungary and the Czech Republic have also been affected. Slovakia is in a state of national emergency. And all because Ukraine won’t pay the price that Russia’s Gazprom is demanding. Analyst Julian Lee:

Julian Lee: Gazprom says therefore it doesn’t have a contract to supply Ukraine and it has no option but to cease delivering gas to Ukraine.

And that, says Lee, has affected supplies to up to a dozen other customers down the line. Gazprom says it’s not to blame.

Lee: It is continuing, it says, to put gas through the pipelines that cross Ukraine for delivery to consumers in Europe. However, it accuses Ukraine of having taken some of that gas out of the pipeline for its own use.

Ukraine denies it and says the whole pipeline network has been malfunctioning since Gazprom turned off its supply. But Ukraine has its critics. Nick McGregor is with brokers Redmayne-Bentley. He says the Russians are being reasonable.

Nick McGregor: Countries such as Ukraine and Belarus were paying a tiny fraction of the market price. So really what the Russians are trying to do is bring them into line with something that’s a little bit more commercially viable.

McGregor doesn’t believe the dispute will drag on. Gazprom cannot afford to upset its European customers for long. They pay full price.

In London this is Stephen Beard for Marketplace.

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