Putin Follows Through On Gas Cutoff Threat

Here's a situation in Europe worth keeping an eye on:

Russia took Europe to the brink of a winter energy crisis yesterday when it carried out a Cold War-style threat and halted gas deliveries to Ukraine, the main conduit for exports to the West.

With a quarter of its gas supplied by Russia, Europe is facing serious disruption and price rises for as long as the dispute rumbles on.

Moscow turned off the tap at 10 a.m. after Ukraine refused to sign a new contract with the Russian state monopoly Gazprom quadrupling prices...

If Ukraine's reserves run out, it could be tempted to siphon off gas intended for other countries. It claims the right to do so in lieu of transit fees.

The cut-off coincided with Russia assuming the rotating presidency of the G8 leading industrialised nations.

In Britain, millions of families started paying higher fuel prices yesterday.

Scottish and Southern Energy raised prices by 13.6 per cent, adding approximately £50 to the average annual bill, while electricity charges will go up by 12 per cent, or about £30 a year.

Npower puts its rises into effect today, adding 14.5 per cent for gas and 13.6 per cent for electricity.

This might be a good time to point out that as local natural gas supplies in Europe and North America are drawn down, three of the leading international sources of natural gas are Russia, Algeria and Iran.

For more, check out the New York Times. To follow the conversation in the Blogosphere, click here.

Technorati tags: Energy, Electricity, Home Heating, Natural Gas, Russia, Ukraine, EU, Vladimir Putin, Electricity, G8