Russia to Double Price of Gas for Georgia Amid Political Tensions

MOSCOW – Russia's state-controlled natural gas monopoly said Thursday it would more than double the price of gas for Georgia, raising the economic pressure on Moscow's small southern neighbor amid spiraling tensions between the two countries.

Georgian Foreign Minister Gela Bezhuashvili said he had received assurances that Russia would not cut off the gas as it did with Ukraine earlier this year, during a particularly harsh winter. That stoppage, amid fierce negotiations over the new, higher price demanded by OAO Gazprom, briefly interrupted deliveries to Europe and sent shock waves through countries already wary of overdependence on Russian energy supplies.

Gazprom, which has been criticized as a tool of Kremlin policy, said in a one-line statement that it plans to charge Tbilisi $230 per 1,000 cubic meters of gas, compared with the $110 that it charges now.

The gas giant has consistently argued the increases are a long-overdue transition to market pricing. However, they have been widely seen in the West as part of the Kremlin's attempts to put pressure on former Soviet republics striving to throw off Russian influence.

"They present it as a commercial deal, but there is a big portion of politics," Bezhuashvili told reporters in Moscow, adding that the new rate was "the price we pay for our choice" in setting pro-Western policies.

Relations between Moscow and Tbilisi have deteriorated steadily since the 2004 election of Georgian President Mikhail Saakashvili, who has sought to take the Caucasus Mountains nation out of the Russian orbit, bolster ties with the West, and join NATO in 2008 — a course that has angered Moscow. In the spring, Russia banned imports of Georgian wine — the nation's top export earner — and mineral water.

Bezhuashvili called gas prices the only tool of influence left to Russia, "but we won't be pressured."

He said his country had worked to diversify its energy sources away from Russia, which has been virtually the only supplier. It is counting on negotiations with Azerbaijan, Turkey and Iran, which can cover Georgia's annual demand of 1.5 billion to 1.8 billion cubic meters, he said.

In spite of Bezhuashvili's positive gloss, any dispute leading to cuts for Georgia could hit its struggling economy hard. Tbilisi already was left freezing for a week early this year after a pipeline explosion in southern Russia cut supplies. Saakashvili blamed Moscow for the interruption, a charges Russian officials angrily denied.

The misery was compounded by major electricity outages after the severe winter weather downed utility lines and a unit at a power station in Tbilisi went out of action. The energy crisis forced desperate Georgians to line up for kerosene and firewood to heat their homes amid the largest snowfall in years.

"This process will be very painful for our generation, but our children and grandchildren will live in a much more developed and rich country," said economist Iosif Tsikarishvili.

"As paradoxical as it seems, we and our whole society are very pleased by this decision by Russia, because the increase in gas prices means that Russia de facto and de jure acknowledges Georgia's full independence, and Georgia will no longer be Russia's vassal."

Relations took a sharp turn for the worse after Georgia briefly detained four Russian military officers in September on allegations of espionage. An infuriated Moscow responded with a sweeping transport and postal blockade on Georgia and a crackdown on Georgian migrants living in Russia.

Russia has shrugged off Western calls for lifting the sanctions, saying it was acting because the Georgian government is plotting to bring its breakaway provinces of Abkhazia and South Ossetia back into the fold by force — allegations Georgia denies.

Bezhuashvili said that Russian officials' top request during his talks in Moscow this week was for assurances that Tbilisi would not use force against the separatist provinces. But he said that it was Moscow, not Tbilisi, that was saber-rattling by "misleading public opinion" with allegations by President Vladimir Putin and other officials that Georgia was preparing for war.

Bezhuashvili told Ekho Moskvy radio that Georgia would use its right to veto Russia's accession to the World Trade Organization to protest Moscow's blockade and ban on Georgian products.

The Georgian Foreign Ministry said last month it had blocked the next round of talks on Russia's bid to join the WTO.