Ordinary Ukrainians Paying The Price For Higher Gas Prices - BBC

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"My pension is worth $75 (£38) a month but the council wants me to pay almost all my pension on bills," complains Galina Alekseeva. "Already we can't afford to eat or drink properly. We can't afford to get sick and pay for medicine. Life is desperate and with the energy bills going up, it's going much, much worse," she adds.

There is now speculation in the media that some people may simply stop paying their bills. "This problem may lead to a negative chain reaction," says political commentator Volodymyr Fesenko. "If the public doesn't pay, this may cause a shortage of funds for the energy companies. This is fraught with political problems and risks."

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Ukraine is one of the biggest consumers of gas in Europe. Its industry is dominated by steel and chemicals producers. These sectors use high levels of gas and there were fears some of these businesses would be destroyed by the increased price of energy. World prices for chemicals and steel have however remained good, limiting the impact, but should the prices drop there are concerns these companies would no longer be able to compete so effectively on the international stage.

"It's the chemicals sector which is likely to be the first to suffer and who will face the threat of bankruptcy," says political analyst Oksana Shulier. Ukraine continues to be one of the most energy-inefficient countries in Europe. The wake-up call that urgent action was needed to transform its Soviet-era energy systems came on New Year's Day in 2006.

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http://news.bbc.co.uk/2/hi/europe/6222355.stm