The Gas Market in Ukraine: The Main Challenges and Possible EU Actions

The double increase of the price of Russian gas for Ukraine in the past few days, re-opens the discussion on the state of the Ukrainian gas sector and the possibility of settling the country’s debts to Gazprom. First of all, Kiev’s budget woes represent the greatest risk to the continuation of Russian supplies. At stake in this case is not only the energy security of Ukraine, but of the European Union itself, as more than half of gas imported from Russia passes through Ukraine. The EU may minimise the risk of a transit crisis by offering Ukraine conditional financial assistance, including the modernisation of its gas industry, and by promoting alternative routes for the EU’s gas supplies.