Georgia, Gazprom Discuss Gas Price Hike
By MISHA DZHINDZHIKASHVILI

Nov. 3, 2006, 12:53PM
Associated Press Writer
© 2006 The Associated Press

TBILISI, Georgia — Georgia said Friday it was trying to persuade
Russian state gas monopoly Gazprom to reconsider its decision to
more than double the price for gas supplies, but would also seek to
diversify its energy imports.

Georgian Prime Minister Zurab Nogaideli told a Cabinet meeting that
the price hike was obviously political because other former Soviet
nations were paying far less. A day earlier, Georgia’s foreign
minister said the new rate was "the price we pay for our choice"
of a pro-Western path.

OAO Gazprom said Thursday it plans to charge Tbilisi $230 per
1,000 cubic meters of gas, compared with the $110 that it pays now,
increasing economic pressure against Moscow’s small southern neighbor.

Nogaideli pointed out that Ukraine got a price of $130 for next year
and Armenia $110, and some European Union nations paid less than
$230, an apparent reference to the three Baltic states. He said that
Georgian officials were talking to Gazprom hoping to reduce the price
it requested.

Georgian President Mikhail Saakashvili criticized the planned increase
but played down its potential effects. "I don’t expect any catastrophe,
but certainly it’s a bad precedent for everybody. Energy cannot
and should not become a political tool," he said during a terrorism
conference in Monaco.

Energy Minister Nika Gilauri said that talks were taking place with
Azerbaijan, Iran and Turkey to secure alternative supplies of gas.
Analysts in Georgia warned of a repeat of the gas war between Russia
and Ukraine at the start of this year when Gazprom cut off supplies.

That stoppage, amid fierce negotiations over a higher price demanded by
Gazprom, was seen as punishment for Ukraine’s pro-Western policies. It
also briefly interrupted deliveries to Europe, sending lasting shock
waves through the European Union nations already wary of overdependence
on Russian energy supplies.

Ukraine, which finally agreed to pay almost double at $95 per 1,000
cubic meters, has since managed to limit the increase for 2007 to $130
after Russian-leaning Prime Minister Viktor Yanukovych took over as
head of government in the wake of his party’s success in March polls.

Neighboring Belarus faces a fourfold rise in gas prices, although
Gazprom is believed to be willing to compromise if the country hands
over 50 percent of the state pipeline through which Russian gas
transits to western Europe.

"Russia is increasingly using the energy weapon for political reasons,"
said Georgian political analyst Ramaz Sakvarelidze. "There is only
one aim, to punish Georgia for its policy of integration with NATO
and European structures."

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