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My objective is to see Russia advancing as a modern civilized country.

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22 April 2010 

"Russian consumers will pay for cheaper gas for Ukraine"

"Russian consumers will pay for cheaper gas for Ukraine, - Mikhail Kasyanov said in his commentary on the recent agreement between Presidents Dmitry Medvedev and Victor Yanukovych to reduce gas prices for Ukraine in exchange for extension of the Russian Black Sea Fleet's residence in Sevastopol. – In such circumstances, there remains a risk of further growth of gas prices for Russians"…

"We know that during the last 3 years the annual increase in tariffs for Russian gas consumers was 30%, without any reason and justification, - ex-prime minister said. – We are told that Russians have to pay as much as Europeans. This, of course, is a matter of lack of proper economic policy. It is the policy of direct support of corporate, I would say, clan interests of Gazprom, associated with the whole power elite. This is enrichment at the expense of all Russians."

As a result of the agreement Ukraine will receive a gas price discount of $100 per thousand cubic meters. The Russian government will establish a special export duty for gas supplies to Ukraine, so that the final price of gas will be 30% lower. The formula prices in the contract remains unchanged, but the system of fines is canceled. In 2010, Russia will sell 30 bn cubic meters of gas and from 2011 to 2019 - 40 billion cubic meters. According to Viktor Yanukovich, Ukraine in 2010 will save $3 bn, and since 2011 - $4 bn a year.

Thus, total losses for the budget of Russia for 10 years will reach $40 billion. According to Dmitry Medvedev, a discount on gas "will be compensated in the rent for the stay of our fleet in Sevastopol." It is not entirely clear how this will be done.

Under the agreement, the term of the Black Sea Fleet's stay in Crimea will be extended for 25 years after 2017 (i.e. until 2042). Medvedev said that Russia, having received such international legal safeguards for its military base, will make substantial investment in the development of not only the Black Sea Fleet, but of the city of Sevastopol.

"Ukraine achieved a very good result: the $ 40 billion plus development of Sevastopol, a pragmatic deal – Mikhail Kasyanov summed up. - As to whether the costs for Russia, it is not clear… But clearly, this agreement will work to improve the Russian-Ukrainian relations."

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