01/16/2008, 00.00
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Uzbekistan and Turkmenistan raise the price of natural gas in the dead of winter

In December, the two governments coordinated an action to raise the price of natural gas, threatening to disrupt supplies. Their neighbouring poor countries are forced to pay. But Iran refuses, and is considering retaliation.

Tashknet (Asia/Agencies) - As the winter cold comes to central Asia, Uzbekistan and Turkmenistan are "closing the spigots" on natural gas, which they have in abundance, in order to get a higher price from nearby countries. This year, temperatures in the region have dropped to minus 20 degrees centigrade, and many governments do not have adequate energy supplies for electricity and heating.

The state news agency of Turkmenistan explains that on December 18, Turkmen president Kurbanguly Berdimukhamedov and Uzbek president Islam Karimov held a telephone conversation in which, "having stressed that energy resources were a strategic factor for the stable development of both states, and the increasing well-being of their peoples, the sides confirmed their readiness for close interaction" on pricing The two countries had already reduced by 50% their exports of electricity to neighbouring  Tajikistan and Kyrgyzstan. A few days after the telephone conversation, Uzbekistan imposed a price hike on natural gas on these countries, from 100-115 dollars to 145 dollars per cubic metre. In 2006, it cost 55 dollars. During those same days, Uzbekistan also asked Moscow to pay more. Russia buys cheap Uzbek gas for domestic consumption, while it sells its own gas and oil to other countries at high prices, mostly to Western Europe. So the request for a price increase does not bother Russia, in part because the Russians can pass on the cost to their European customers. Local sources say that at the end of December, Moscow agreed to a higher price, one about the same as what it already pays Turkmenistan. There have been no official announcements, which has led many to believe that more detailed negotiations are underway, involving other countries like Turkmenistan and Kazakhstan. Moscow, in fact, wants to secure for itself the energy resources of the former Soviet states, instead of seeing them go eastward, to China and India, or to Europe through the Caspian Sea and Turkey.

But the price rise has been drastic for Tajikistan and Kyrgyzstan, which have had to increase prices for customers by 30% and 50% respectively. Poverty is widespread in these countries, and there are fears that there will be an increase in the numbers of migrant workers leaving Tajikistan for the richer countries of Russia and Kazakhstan.

Analysts maintain that Karimov also wants to increase his political influence over the two neighbouring countries, blackmailing them with the price of natural gas.

For its part, Turkmenistan has tried to act in the same way toward Iran, raising the price of gas and threatening to disrupt supplies. But Tehran has refused, and has threatened to boycott Turkmenistan's energy supplies. For more than two weeks, part of northern Iran has stopped importing gas from Ashgabat. Iran's deputy oil minister, Akbar Torkan, has commented on state radio that it is "immoral" to cut energy supplies in the middle of winter. Iran has announced that it will go to an "international tribunal" to ask for sanctions against Turkmenistan.

Analysts observe that these price hikes bring no benefit to the populations of Uzbekistan and Turkmenistan, and that instead the people suffer from shortages of gas and electricity, because their governments favour export over domestic needs. Entire villages have been cutting down all of their trees and burning whatever they can to try to keep warm.

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See also
Moscow having trouble maintaining role of "hegemony" in Central Asia
Turkmenistan: gas pipeline to China is ready
Jakarta sets up task force to fight energy mafia
Chinese inflation remains high, economic growth slows
Europe could soon buy energy from Iran, against U.S. wishes


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