Crimea swallowed up by Russia, but Ukraine controls power, water

Laura Mills

Associated Press

Published: Wednesday, March 26 2014 12:00 p.m. MDT

But Dmitry Kirillov, the head of water resources department at Russia's Natural Resources Ministry, said that Crimea's potential water problem isn't that threatening. He argued that the agricultural sector accounts for the bulk of the region's water consumption, and a possible water shortage can be overcome simply by stopping the cultivation of some crops, such as rice, and focusing on traditional winemaking.

Adversity for the peninsula may prove an opportunity for Ukraine, which is already signaling its intent to withdraw some of the state subsidies for essential resources that have kept prices relatively low.

Sergei Sobolev, head of the parliamentary faction of the Fatherland party, whose leading members now dominate the government, has argued that special tariffs should be established for power and water supplies to Crimea.

The need to raise funds for Ukraine's cash-strapped treasury will prove particularly acute against the backdrop of reported Russian plans to increase the price of natural gas to $405 per thousand cubic meters. Late last year, Russia agreed to help prop up the teetering government of now-ousted President Viktor Yanukovych by selling Ukraine gas at $268.50 per thousand cubic meters, but it has recently announced a decision to scrap the discount.

"We have no intention of subsidizing citizens of the Russian Federation: the occupiers that have now deployed their armed contingents on temporarily occupied territory," Sobolev was cited as telling parliament this week by the UNIAN news agency.

Sobolev said that prices for gas and electricity in Crimea are priced four times below market cost and that water is provided at one-seventh of its real value.

Vladimir Omelchenko, an energy analyst at the respected Kiev-based Razumkov Center think tank, said Ukrainian companies will now charge prices that would bring a profit. He said it would be unrealistic to expect that Ukraine could win security guarantees from Moscow or persuade it to return the Ukrainian military equipment seized in Crimea.

Alexander Konovalov, the head of the Institute of Strategic Assessment and Analysis, an independent think-tank, said that Ukraine could potentially profit on its current monopoly on providing power and water supplier to Crimea. But he added that Moscow's refusal to engage in a dialogue with Ukraine's new government was hampering any meaningful dialogue.

"To start bargaining, you have to sit down for talks," Konovalov said. "And Russia has said the (Ukrainian) government is illegitimate."

Either way, many of the Crimeans who have supported the Russian annexation remain confident Russia will come to the rescue if matters get any more serious.

"We've lived through this before, I'll just go and buy some candles," said Olga Dusheyeva, an 81-year-old former math teacher. "I'm not scared, I know that Russia will always help us."

Associated Press writer Yuras Karmanau in Kiev, Ukraine and Vladimir Isachenkov in Moscow contributed to this report.

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