Russia Doubling Gas Price To Georgia.

Russia on Nov. 2 intensified economic pressure on Georgia as the state-controlled Gazprom indicated it would seek to more than double the price it charges for natural gas beginning in January. The proposed increase followed a series of punitive restrictions Russia put on trade with Georgia, including bans on its wine, mineral water and fruit and vegetables and a suspension of air, rail and road transport between the two neighbours. The dispute began when Georgia accused Russians of espionage.

Gazprom's proposed price - subject to negotiation but unlikely to change significantly - made it clear that Russia did not intend to relax the pressure it imposed on Georgia as relations between the two neighbours deteriorated precipitously in recent months. The price - $230 per 1,000 cubic metres of gas, compared with $110 now - would be comparable to what Gazprom charges the wealthier nations of Europe.

Gazprom has insisted it would raise prices for former Soviet republics to the same level as Europe, effectively ending subsidised energy to its neighbours. But it has made exceptions. Gazprom recently agreed to charge Ukraine $135/000 CM after negotiations with the new prime minister, Viktor Yanukovich, who is friendlier to Russia than his predecessors in the post. And Armenia reached an agreement this year to pay at a rate of $110/000 CM until 2009, after surrendering control of a pipeline.

The Chairman and CEO ArmRosGazprom, Karen Karapetyan, told a news conference on Oct. 31 that Gazprom intended to buy the Iran-Armenia gas pipeline. In late June 2006 Deputy Chairman of Gazprom Board Alexander Ryazanov stated that the company was going to buy the Iran-Armenia gas pipeline. In his words, the putting into operation of the gas pipeline will secure gas supplies to Armenia. Ryazanov said: "There are problems referring to gas transit to Armenia via Georgia, as Georgia ...