Wednesday, November 19, 2008
Gazprom slams users who claim they can't pay as credit crisis pressures payments
18 November 2008 - Russia Today - Russian gas giant Gazprom has slammed countries which claim they won't be able to pay for next year's gas deliveries due to the global financial crisis. Nations including Belarus, Serbia and Hungary, which rely heavily on Gazprom supplies, have sought IMF bailouts to cover gaps in their budget, and Ukraine is hiking consumer gas prices 35% from December to plug its debts to Gazprom. But in an interview with Business RT at the International Gas Forum in Moscow, Deputy CEO Aleksandr Medvedev said if states can't pay, they should use less gas. “Every commodity that's delivered should be paid, we're not a charity organization. It's a little bit of a strange statement that in advance they'll not be able to pay. Obviously it's difficult economic situations in different companies and countries. But then they should look at their consumption models, to take as much gas as they could pay.” Also Speaking to Business RT, Joseph Stanislaw, Deloitte's Independent senior advisor on Energy & Resources, said Gazprom is right to demand payment in full for its gas supplies, but noted the problems being faced are not just limited to a few countries and reflect a worldwide shortage of credit. “It’s a complicated issue. He’s absolutely right. If they cant afford to pay they shouldn’t buy. And the reality is the price will be too high for them because of exchange rate changes and other things. The demand will go down – no question of that. But in the short term they cant change their behaviour very very quickly. In the very short term this crisis means people can not pay debts and have access to credit lines. Its an issue of access to credit lines more than anything else. In the United States for example, there are major power companies who cant get access to credit to continue producing electricity. That was the state of affairs for about a month in the United States. It’s complicated all over the world, its not isolated to the countries he mentioned. So it’s a matter of how do you make concessions, understanding that at the time theres a severe need, and a severe crisis. This is a serious world economic problem."