#Commentary of Marina Zheynova due to appeal of Naftogaz to Ukrainians to reduce gas consumption, or: We have gas in out flat, and you?

Gazprom decided not to supply gas to Naftogaz of Ukraine from March 1. The actions of Gazprom, in turn, were caused by the decision of the arbitration court in Stockholm of February 28.

Let’s try to understand what happened and who and what is to blame for. It should be recalled that on February 28 the court ruled on the second transit claim, and the decision on the first lawsuit on gas supplies was made in December 2017. According to this judicial decision, for Ukraine the gas price was reduced to $352 per thousand cubic meters. This price was less than what Gazprom asked, but more than Naftogaz asked for. The court explained its decision by the difficult economic situation in Ukraine. However, as a result, according to this decision Ukraine had to pay 2.07 billion dollars.

In the second lawsuit, Naftogaz demanded, firstly, compensation for the fact that the transit gas was not pumped in the amount envisaged, in its opinion, by the contract, and secondly, the tariff increase for transit. The maximum amount of claims of Naftogaz to Gazprom was $15 billion.

As a result, the tribunal took a negative decision for Gazprom on the claim on the transit volumes, but did not support Naftogaz’s proposal to revise the tariff. Thus, after the netting of debts, Gazprom must pay 2.56 billion dollars to Naftogaz.

It would seem that Gazprom partially achieved its goals. The price of natural gas was reduced, but not from the date that Ukraine wanted. In addition, international arbitration indirectly acknowledged that Ukrainian antitrust decisions do not apply to gas deliveries and transit, that is, Gazprom has escaped from the blows of Ukrainian antimonopoly bodies, which have also tried to impose multibillion fines on it. But the reaction of Gazprom is nevertheless far from recognition of the arbitration award.

“The Stockholm arbitration, guided by double standards, adopted an asymmetric decision on contracts for the supply and transit of gas with Naftogaz of Ukraine,” the director of the Russian company said.

Where is the asymmetry? The fact is that, according to the decision on the first lawsuit, Ukraine was reduced the price of gas based on the problems in its economy, and in the second suit, Gazprom was not forgiven for the decrease in transit volumes, which the company argued for a decrease in the level of gas purchases in Europe.

Thus, in one case, arbitration is not guided by law, not by law, or by legal norms, but by the strange argument “Ukraine is poor, it has nothing to pay with, so let’s forgive its debts,” and in the second case we see pre-letter adherence to the contract and complete disregard for its spirit, and also common sense.

The reaction of the Russian company was perfectly healthy: “We are absolutely opposed to Ukraine’s economic problems being solved at our expense. In such a situation, the continuation of contracts for Gazprom is economically inexpedient and unprofitable.” After that, the Ukrainian company was returned an advance payment for March, the termination of contracts with it was launched and simultaneously the filing of appeals on this decision of the court was announced.

The Ukrainian press and political elite reacted to this situation with a heap of accusations against Russia. The management of Naftogaz, which recently loudly announced its victories, began to urge Ukrainians to stop heating in their homes: “We need to withstand out only 3-4 days, until the cold passes,” says Naftogaz. Although “us” in this case is said too loudly, it will not be Naftogaz who has to withstand, but ordinary Ukrainians.

I recall that more recently, Yatsenyuk said that Ukraine had its own gas, which is way cheaper than Russian. And this gas is enough to heat the settlements, hospitals and schools. As it turned out, he lied again.

What do all these events indicate? First of all, we see that all the stories about Ukraine’s energy independence are the propaganda of its politicians. Well, and secondly, we have a vivid illustration of folk wisdom: “Let every man praise the bridge he goes over.”

Marina Zheynova, the DPR People’s Council deputy

Official website of the DPR People’s Council

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