UKRAINE: PRESS COVERAGE OF THE GAS DISPUTE WITH RUSSIA

UNCLAS SECTION 01 OF 02 KIEV 005150

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TAGS: KPAO EPET ENRG PREL PGOV RS UP
SUBJECT: UKRAINE: PRESS COVERAGE OF THE GAS DISPUTE WITH RUSSIA



1. Summary: Most Ukrainian media have described Russia's
intention to hike Ukraine's gas prices as politically motivated.
Many press reports also highlighted the assertion from Ukrainian
leaders that this is a step in Ukraine's transition from
patriarchal to pragmatic relations with Russia. Depending on
the political leanings of the media outlet, differing, yet
oftentimes predictable, press coverage emerged on who is to
blame for the crisis, what the impact will be on Ukrainian
energy policy, and who will gain in the upcoming parliamentary
elections as a result of the gas price increase. End summary.

WHO STARTED THE GAS DISPUTE - THE BLAME GAME


2. Many news outlets, including the pro-Yushchenko 5th Channel
TV station and Donetsk Ukrayina, Donetsk-based oligarch Rinat
Akhmetov's TV station, cited former Prime Minister Viktor
Yanukovych's statement on December 19 that the Ukrainian state
oil and gas company Naftohaz Ukrayiny is to blame for the
dispute for first proposing the price change in July 2005.
These reports also quoted former Prime Minister Yuliya
Tymoshenko criticizing the "intermediaries for destroying the
balance of Russian-Ukrainian gas." She stated that the natural
gas issue would disappear with the "elimination of corruption
and shadow schemes."


3. The 5th Channel televised Naftohaz Ukrainiy's rebuttal on
December 21 stating that in March 2005 Russia proposed revised
rates for the transport of gas across Ukraine. Naftohaz said
that the opposition Party of Regions was simply twisting the
facts, trying to gain political dividends in the run-up to the
parliamentary elections.


4. Ukrayinska Pravda, a popular news website, on December 12
blamed previous administrations for the conflict. It stressed
that the "numerous 'successful understandings' brokered by
Kravchuk-Kuchma should have been substituted by alternative
sources of energy and energy conserving technologies. Had this
been accomplished, the issue would not have arisen in the first
place."

MANY PRESS DESCRIBE GAS DISPUTE AS POLITICALLY MOTIVATED


5. Many Ukrainian TV reports described the proposed Russia gas
price hike as politically motivated. "It is no secret that
Russia uses its energy resources for ensuring political loyalty
of some countries." (INTER, Podrobitsi Tyzhnya, 12/18/05) "With
the gas price Russia strikes back in response for the change of
foreign policy priorities [by Ukraine]." (STB, Vikna-Novyny,
12/16/05) "Member of Parliament Yuri Klyuchkovsky says Russia
is using gas talks as an instrument of political pressure on
Ukraine." (UT-1, Novyny, 12/19/05)


6. The "orange" print media (Ukraina Moloda, Dzerkalo Tyzhnya,
Vechernie Vesti) portrayed the Russian policy as an attempt to
punish Ukraine for a 2004 presidential election that
contradicted Moscow's will.

OPPOSITION MEDIA BLAME DISPUTE ON YUSHCHENKO GOVERNMENT


7. The opposition papers (Segodnya, Kievskie Vedomosti, 2000
weekly) lamented the rise of gas prices, particularly by saying
how this increase would hurt private households. They viewed
the Russian position as a given, dismissed any possibility of
Ukraine prevailing with its arguments, and blamed the Ukrainian
government for its inability to negotiate effectively. These
newspapers also claimed that the Ukrainian government provoked
Russia by pursuing an anti-Russia policy. Segodnya stated on
December 16, "The closer to NATO, the more expensive is the
gas."


8. December 16 and 19 TRK Ukraina TV reports blamed the
Yushchenko team for the crisis. The programs quoted Vyahceslav
Boguslayev, General Director of Motor Sich and Party of Regions
candidate; Lyubov Slivka, a Russian parliamentarian; and Adam
Martynyuk, a Communist Party parliamentarian and Rada Vice
Speaker, strongly criticizing Naftohaz Chairman Oleksey Ivchenko
for poor negotiations. They blamed him and the political forces
behind him for the dispute.


9. Calling into question Ukraine's low gas prices, the highly-
popular, opposition-leaning Inter television stated on December
19 that the "Ukrainian population pays the lowest price for gas
in Europe, thirty-six U.S. dollars per thousand cubic meters.
It costs more even in Russia - forty-four dollars for the same
amount of gas." The report also stated that "Kyiv had itself
offered last spring to go over to market prices, but began to
backpedal shortly afterwards." Russian Ambassador to Ukraine
Viktor Chernomyrdin also said on the 5th Channel on December 16
that "Russians are paying more for gas than Ukrainians."

FROM PATRIARCHAL TO PRAGMATIC RELATIONS

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10. Many media reports (Inter, Unian, ICTV, Radio 1, Glavred,
and UT-1) featured quotes from top Ukrainian leaders --
President Viktor Yushchenko, Prime Minister Yuriy Yekhanurov,
and Foreign Minister Borys Tarasyuk -- stating that politics
should be put aside in this discussion and a pragmatic approach
should become the basis of Ukrainian-Russian economic
cooperation.


11. The 1+1 television channel, Unian, and UT-1 discussed the
need for Russia to uphold its bilateral agreement with Ukraine
on the Black Sea Fleet deployment. Foreign Minister Tarasyuk
called it "inadmissible to link a possible revision of terms of
the deployment in Crimea and the gas price increase." The
reports stated that Russia failed to meet its commitments under
bilateral agreements by polluting the Crimean coast, using land
plots improperly, and failing to return equipment. As a result
and due to the movement of Kyiv and Moscow to more pragmatic
relations, the Ukrainian officials argued that it was time to
address these problems.

CRISIS TO PROMOTE GREATER ENERGY EFFICIENTCY AND INDEPENDENCE?


12. The centrist Den newspaper speculated that the gas crisis
would strengthen Ukrainian independence by forcing an urgent
energy-efficiency program and a departure from energy dependence
on Russia. The 1+1 TV news report of December 18, however,
criticized the authorities for not setting up the proposed
energy saving agency earlier.

IMPACT OF THE PRICE INCREASE ON THE UPCOMING ELECTIONS


13. The "orange" media believed that the energy crisis would
diminish the opposition Party of the Regions' popularity, since
energy-inefficient industrial giants in Eastern Ukraine would be
the hardest hit with the price hike. Many press reports,
including the news website Glavred, speculated that the Our
Ukraine Bloc would benefit from the dispute because the row
overshadows reports about in-fighting and corruption within the
Yushchenko team. Russia's hard-line stance may also be a
unifying force for the entire Ukrainian nation. The programs
argued that if used skillfully, the gas crisis could work to
President Yushchenko's advantage.


14. Conversely, the "blue" opposition media predicted gains for
the opposition in the run-up to the parliamentary elections
because of the government's anticipated failure to resolve the
crisis in a satisfactory manner.

Herbst