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Gazprom to Double Prices for Georgia

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Georgian foreign minister said the price hike was the cost of his nation's turning away from Moscow and toward the West.

OAO Gazprom said in a statement that it will charge $230 per 35,314 cubic feet of gas, compared with the $110 that it charges now. The announcement signaled Russia's continued recalcitrant stance even as Georgian Foreign Minister Gela Bezhuashvili visited Moscow in the hope of easing relations between Moscow and Tbilisi.

The relationship has steadily deteriorated since the 2004 election of Georgian President Mikhail Saakashvili, who has sought to take the Caucasus nation out of the Russian orbit, bolster ties with the West and join NATO in 2008.

Tensions rose between the two countries after Georgia briefly detained four purported Russian spies in late September. Moscow responded with a transport and postal blockade on Georgia and a crackdown on Georgian migrants living in Russia, whose financial remittances help sustain their homeland's economy.

Moscow has shrugged off Western calls for lifting the sanctions against Georgia, saying it was acting because the Georgian government is plotting to bring the breakaway provinces of Abkhazia and South Ossetia back into the fold by force -- allegations Georgia denies.

Bezhuashvili said he was not surprised by the announcement because Russia had been warning that it would put Georgia on the same payment terms as other European nations, and that he had received assurances that Moscow would not cut off gas or electricity supplies to his country.

But, he said: ''They present it as a commercial deal, but there is a big portion of politics.''

Bezhuashvili told reporters in Moscow that the new arrangement was ''the price we pay for our choice'' of setting pro-Western policies.

He called gas prices were the only tool Russia had to influence Georgia, ''but we won't be pressured.''

Bezhuashvili said his country had worked to diversify its energy sources away from Russia, which has been virtually the only supplier. It is counting on negotiations with Azerbaijan, Turkey and Iran, which can cover Georgia's 56-63.5 billion cubic meter annual demand, he said.

Gazprom has consistently argued that price increases for former Soviet neighbors are a long overdue recalibration toward market pricing. However, the increases have been widely seen in the West as part of the Kremlin's attempts to rein in ex-Soviet neighbors.

Gazprom temporarily switched off the gas it supplies to Ukraine at the start of this year after Kiev refused to accept an abrupt price hike that was seen as a calculated blow to its Western-leaning government.

Since the appointment of Kremlin-friendly Prime Minister Vikor Yanukovich, however, Ukraine has been able to negotiate a much more gentle price rise for 2007.

Georgia's economy already is struggling. Tbilisi was left freezing for a week this year after a pipeline explosion in southern Russia cut supplies. Saakashvili blamed Moscow for the interruption, charges Russian officials angrily denied.

Cuts would also deal a blow to Georgia's landlocked neighbor, Armenia, which receives its gas from Russia via Georgia. Armenian businesses already have been forced to organize costly new export routes to Russia due to the transport blockade.