For Ukraine, the price of imported natural gas more important as negative developments hit the economy. Growing debts, an increasing trade deficit, falling currency reserves and export opportunities are weighing down the country as it gradually slips into recession.
Ukraine’s government lacks resources for policy maneuvering and must make unpopular decisions to solve the economic crisis. The fact that Ukraine buys less natural gas from Russia does not indicate that the government successfully diversified energy supplies, or that Ukraine successfully introduced new energy-saving technologies.
Rather, it means that Ukraine is suffering a decline in industrial production. Domestic gas production is growing at a slow pace while investment risks deter foreign companies. Thus, in the next two or three years, the nation will have no real alternative to natural gas supplies from the east.