Europe faces gas price hike as Ukraine ends transit agreement
The agreement for the transit of Russian gas through Ukraine to Europe will expire in a few days. Our eastern neighbours have already announced that they do not intend to extend it. The Kremlin is trying to put on a brave face, but the Russian giant Gazprom will lose a few billion dollars annually because of this. At the same time, Putin decided to threaten Europe with increased gas prices.
In an interview with the Russian news agency TASS, Vladimir Putin stated that gas prices in Europe will definitely increase after Ukraine ends the transit of Russian fuel through its territory, which is supposed to happen soon. He downplayed the impact of this decision on Russia.
"The transit agreement will no longer exist, that's clear. Ukraine refused to extend it despite receiving 700-800 million dollars annually. But that's fine. We will survive; Gazprom will survive," Putin said at the annual press conference summarizing the year at the Kremlin.
This concerns the agreement between Ukraine's Naftogaz and Gazprom for the transit of Russian gas through Ukraine to Europe, signed back in 2019. Ukraine decided not to extend it; the transit will end on January 1, 2025.
As we wrote in money.pl, after Poland cut off pipeline supplies (which happened on December 31, 2022, when the so-called Yamal contract, Poland's long-term gas agreement with Gazprom, expired) and the EU imposed restrictions on importing LNG from Russia, it was through Ukraine that Russian gas powered countries such as Slovakia, the Czech Republic, Hungary, Italy, and Austria. And now Kyiv is turning off the tap. As noted recently by "Rzeczpospolita," Gazprom will lose at least 5.3 billion dollars annually because of the Ukrainians' decision.
Not everyone is happy with this decision. It will hit Slovakia hard, which still relies on raw material supplies transported by our eastern neighbours. Vladimir Putin's latest comment demonstrates that the Kremlin is also unhappy with this turn of events.
