From Foreign Policy Blog:
Another cold Russian winter, another dispute about Russian gas prices. Time's Yuri Zarakhavich has a useful summary:
In the buildup to Dec. 31, Russia accused Ukraine of having arrears of more than $2 billion on its expired gas contract. Ukraine said that it had paid all its debt. Moscow said it would start charging a new price, which it presented as both the "market" price and a "preferential" rate—just $250 rather a sharp rise on the 2008 price of $179.5 per 1000 cubic meters of gas. Ukraine said that it could pay $201.
In response, Gazprom, Russia's state-run natural gas monopoly, dropped its "preferential" offer and said it would have to charge the real "market" rate of $418. It also insists that Ukraine still owes Moscow $ 614 million, and, at 10am on Jan. 1, turned off gas taps to Ukraine.
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