Tensions are mounting between Russia and Ukraine over the former's massive hike in the price of natural gas it sells to the latter. Ukraine has until now received cut-price gas in return for allowing Russia to pipe fuel across its territory to western Europe. But Gazprom, the state-owned Russian fuel company, has announced it is raising the price for gas supplied to Ukraine by more than 400%.

Ukraine hit back earlier this week, warning it had the right to take 15% of the Russian gas piped to Europe in return for transit fees, a move that Gazprom warned would be tantamount to theft.

Russia provides the European Union with about half its gas imports—80% of that passing through pipelines that transit Ukraine.

On Dec. 28, Ukraine’s Prime Minister Yuriy Yekhanurov denounced Russian demands as his country's energy minister travelled to Moscow to try to resolve the dispute. "The Ukrainian side believes that the price increase is unacceptable and...a direct economic pressure against Ukraine," said Yekhanurov. (London Times, Dec. 28)

Ukrainian President Viktor Yushchenko meanwhile implies that Kiev could hit back by reconsidering the terms of leasing the Sevastopol naval base in the Crimean peninsula.

"The agreement on the Black Sea fleet base is one part of a bilateral treaty, the second part of which contains recognition of mutual borders," Sergei Ivanov said in televized comments. "Trying to revise the treaty would be fatal."

The 1997 pact gave new legal status to the historical home base of the Black Sea fleet, which Russia inherited from the Soviet Union, and ruled out Moscow's territorial claims to Ukraine. After the Soviet Union fell apart in 1991, Russian nationalists have staged an aggressive campaign to take back Crimea, handed over to Ukraine in a symbolic gesture by Soviet leader Nikita Khrushchev in the 1950s. Ukrainian nationalists, for their part, have demanded that Russia withdraw the Black Sea fleet from Sevastopol, where it has been based since the 18th century. (People's Daily Online, Dec. 28)

Existing and planned pipeline routes were a key behind-the-scenes factor in Ukraine's 2004 Orange Revolution.

See our last post on Russia and Ukraine.