Is the Kremlin raising gas prices as of July 1st to prevent the ascension of Yulia to the premiership? That is one of the explanations for why Moscow is raising the gas price right now asserted in an article from RFE/RL. I suppose the argument is that if Yulia is PM she'll tear up the agreement made in January, which she has said she will do and that is not good for the Kremlin. But will raising the price of gas prevent that from happening?
The argument would have to go something like this: We'll raise the price on them to show them we can do it any time we want to. Knowing that, they will be careful not to choose someone who'll just make us want to do it again. That means no Yulia.
That doesn't follow too well to be even the kind of thinking the Kremlin might come up with.
I think we're beyond that sort of thing. They are raising the price because they can do it. Are they looking for anything in return like pressuring Ukraine to return to the fold? I don't think so. I think it's a question now of maximizing profits. Gazprom is looking to make a public offering and I think they are wanting to make it look as good as they can. It's simply a question of profitability and money and the fact that they can get it by raising the rates. And Ukraine has been so ham-handed at any kind of response I think the Kremlin thinks it can weather any kind of criticism that might come of it. And they very well might be able to. We'll see.
Putin has to keep two sets of people happy, the clans in the Kremlin and the people. He keeps the clans happy by giving them businesses. He keeps the people happy by keeping the economy humming and maintaining stability. Gazprom is crony run and may be the place Putin ends up after he leaves office. Making sure it's doing well benefits the cronies and the economy (and may ensure it is a real power base for his use later.) That means one stone for helping to keep two birds happy--or something like that.
The price of natural gas has gone up 50% for residential uses. There has been some reaction but not much. But that is a real signficant rise in the price. And raising the price further might mean real economic problems ahead. And it will mean hardship for a number of people.
A lot of people here cannot afford to live as things stand now. If the cost of living goes up because of the rise in price of natural gas, that might just push these people over the edge. What will they do then?