New Year Start

Happy New Year!

Hope all of you had a great New Year's Eve with a lot of chilled champagne and fantastic fireworks in the company of loved ones!

Let me start with good news: I am not freezing. Yet. There is still some gas in the pipes. But the central heating system is weaker by day. Given outside temperature is around -11 C let’s hope that indeed Ukraine has enough gas reserves until April as politicians state. Fortunately I have electric heaters so no need to burn my furniture.

While I still enjoy moderately warm apartment last week I had to manage without internet. Past two days there was no warm water in my apartment block. The cold water I get looks like “coke” and smells funny.
Initially water was to be a temporary one day thing. But continues for a second day. I have enough drinking water but keep fingers crossed for a nice hot shower tomorrow.

In any case being connected again feels good. But good things in Ukraine do not last long so I want to use this “connected moment” to share my thoughts about the “gas issue”.
There is enough money to pay for gas. The bill for USD 1.8 bn was due in October but since than have not been paid. All individuals in Kiev using gas (about 4 mio of them) have to prepay gas bills. If they do not pay a bill tthey do not get gas (Kiev mayor who drives Rolls Royce applies same Gazprom tactic).
However the Ukrainian government was reluctant to pay its bill on time. Why to show discipline in paying bills if people in power have incentive for paying bills with a two months delay?
The entire process of gas prices negotiations between Gazprom and Ukraine is so murky it will make water coming currently from my tab cristal clean. And where you do not have transparency there is a lot of money to be made – for some. That "some" appears to be “RosUkrEnergo” - a Swiss registered trading company acting as intermediary between Russia and Ukraine. It’s ownership structure 50% owned by Gazprom and 50% by Ukrainian oligarch Dmytro Firtash - is telling. What RosUkrEnergo does is “exporting” Russian gas to Ukraine. How export works is that on the RU-UA border RosUkrEnergo purchases Russian gas and re-sells it to Ukraine. RosUkrEnergo as an intermediary both Russia and Ukraine can easily do without is that it’s a well oiled machine to make loads of money. And who cares that millions of people might freeze when one can make billions! Thus while Russian and Ukrainian oligarchs argue about dividing a loot, people across Eastern Europe will freeze. Shame European Union has no guts to press the issue.