The dispute between the Ukraine and Russia ain't no trade dispute despite what the Chicken Noodle News outlets are tellin' us. Putin hates Ukrainian President Viktor Yushchenko whom he tried to Bhopal in a botched poisoning hit. Matters weren't made rosier by American election rigging consultants brought in to successfully pull off the slick Orange Revolution coup d'etat right under Putin's beak.
Russia is in the process of reasserting herself as a superpower and she's using her vast energy resources to do so this time around. The private aspect of energy ownership in Russia has been aggressively neutered and Gazprom is now snugly liased with the Kremlin as an instrument with which to project power.
In this latest round of Russian-Ukrainian posturing, Putin tried to blackmail Yushchenko using gas prices but the brinkmanship spiel went a bit too far and now the two parties are sitting there like silly ducks not knowing what to do after threats and bluffs have been called. Meanwhile Western Europe is waiting for its gas.
Russia will eventually have to sell all its gas at world market prices (and thus avoid being accused of dumping energy intensive domestic aluminum on the world market) if it wants to follow through on its ambition of joining the WTO. That will entail inevitable price hikes on both domestic gas sales as well as sales to the Ukraine, favored Belarus, and elsewhere - but this sudden browbeating hike in price for the Ukrainians is for the time being only about meddling with their upcoming parliamentary election in an attempt to undermine President Yushchenko's juice. It's all rather Abbott and Costello funny if ya ask me.