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EU wants same price for Russian gas for all its members: Oettinger

EU Energy Commissioner Günther Oettinger said today (2 May) that the EU wants a uniform price for Russian gas for all its member states, adding Europe’s common gas infrastructure should include Ukraine, Georgia and the western Balkans.

Oettinger was speaking after a meeting with Polish Prime Minister Donald Tusk, who promotes an idea of an EU energy union and joint purchase of Russian gas, ahead of talks with Russia and Ukraine on the security of Russian gas deliveries to Europe.

“We want a uniform gas price in the European common market,” Oettinger said at the joint news conference with Tusk.

“The game of ‘divide et impera’ (divide and rule), or a game of this type proposed by Moscow cannot be and will not be accepted by EU member states,” Oettinger said.

Tusk has recently appealed on his fellow EU leaders to create an energy union to secure the Union’s its gas supply [read more].

Currently, EU member states buy Russian gas on the basis of bilateral contracts with Moscow, and pay different prices. Common purchases would improve EU’s negotiating power and cut the price.

“We have very big differences in terms of gas prices. The higher the share of Russian gas in purchases and the bigger monopoly Russia has in supplies, the higher the prices are,” Oettinger said.

The EU has made progress in improving its energy security since gas crises in 2006 and 2009, when rows over unpaid bills between Kiev and Moscow led to the disruption of gas exports to western Europe. But so far, EU reliance on imported oil and gas, especially from Russia, has been rising, not falling.

Oettinger also said that Europe should have pan-European grids for natural gas and electricity, including more power links between countries and should increase the diversification of its energy imports.

“The infrastructure with regard to gas and energy transit should have a pan-European character and should also include Ukraine, Georgia and Western Balkans,” Oettinger said. “We want to prove our solidarity with Ukraine.”

Ukraine fully supports the idea of introducing a unified price for natural gas in the European Union, its Energy Minister Yuri Prodan told reporters in Warsaw ahead of a meeting with his Russian counterpart and Oettinger.

Oettinger is due to meet with Russian energy minister Alexander Novak today in Warsaw [read more]. 

Background

Russia’s gas export monopoly Gazprom sells its gas to EU clients under secretive bilateral deals.

An illustration on how Gazprom uses the price of gas as a political weapon was provided in the context of the unfolding Ukraine crisis.

Ukraine was paying Gazprom a price of $400 per thousand cubic metres (tcm)under an agreement signed under former Prime Minister Yulia Tymoshenko, back in 2009.

After former President Viktor Yanukovich refused to sign the EU-Ukraine Association Agreement, and opted to develop relations with Russia instead, Gazprom brought down the price of its natural gas for Ukraine by a third - to $268 dollars per tcm.

But after Yanukovich fled the country and a new pro-European government took over, Gazprom raised the price by 80%, to $485 per tcm.

Ukraine is currently trying to obtain gas through “reverse flows” from Poland, Hungary and Slovakia. Although this is basically Russian gas, it was still cheaper than the price of around $400 per tcm Kyiv was paying until the December 2013 agreement.