Russia Wielding Monopoly Power

Monopolies can do more than just harm consumer surplus they can translate to substantial political power. Russia's government owned natural gas company, Gazprom has shown itself to be a huge player in the Ukrainian annexation. Gazprom holds control over many European natural gas supplies and the closer the country is to Russia the more dependent they are for Russian gas.

Gas Prices in Europe

Russian gas control has translated into strong political muscle. Acting as a monopoly Gazprom is able to raise prices on natural gas at will. Ukraine is somewhat helpless because they rely on Russia for half of their total gas needs. Gazprom "The chief executive, Aleksei B. Miller, said Gazprom had stepped up the price by an additional $100 per 1,000 cubic meters, to $485, far more than Gazprom charges utilities in other countries." Ukraine Struggle This influence has also been a factor in preventing intervention from other European Countries. Most of the continent is dependent on Russia for their natural gas supply. In order to be strong politically many are pushing for Europe to be independent from Russian natural gas. This however would be no small feat; it would cost Europe "$160 for every single person in Europe." Gas Prices in Europe If big changes don't come Europe may be "stuck with Russian gas" Gas Prices in Europe. One option is to get gas to Ukraine from other Europe how pay less to Russia, which could cause more harm than good. The other is to look elsewhere for a natural gas supply for all European, which would come from countries like the US or find some natural gas substitutes fast.