Russia's gas monopoly Gazprom today threatened to more than double gas prices for Georgia from 2007 putting more pressure on Tbilisi in its worst crisis with Moscow in years.
Russia has cut transport links with Georgia in a row rooted in Tbilisi's pro-Western policies and a fight for influence over separatist Georgian regions. The first high-level talks since the crisis began failed to achieve a breakthrough on Wednesday.
A Gazprom official said the company wanted Georgia to pay $230 per 1,000 cubic metres, up from $110.
If that becomes the final price, the impoverished Caucasus state of five million would be paying more for its gas than any other ex-Soviet state except the Baltics and the same as Gazprom's rich customers in the European Union.
"It is clear we are dealing with political, and not commercial negotiations," Georgian Prime Minister Zurab Nogaideli said at a government meeting convened to discuss the gas price. "We will try to get it lowered."
Standard & Poor's financial market intelligence company forecast a price of $230 would shave 1.1 percentage points off Georgian gross domestic product in 2007. That would be on top of a 1.2 percentage point slowdown in GDP growth Tbilisi says it expects from the Russian sanctions.
A Gazprom spokesman declined to comment on allegations the price was political. "This is a proposal. The final price will be determined in the course of negotiations," he said.
Russia was earlier this year accused of using energy to blackmail its former Soviet neighbours after it briefly turned off gas to Ukraine in a price dispute.
Georgian Foreign Minister Gela Bezhuashvili said a meeting with his Russian opposite number Sergei Lavrov had failed to produce a breakthrough in a crisis that has dragged relations to their worst level in years.
But he said he was not leaving Moscow with empty hands, pointing to an agreement on both sides to "calm down belligerent rhetoric" and an assurance that Moscow will not cut off energy supplies to Georgia.
The talks in Moscow were "a positive sign that the two countries are ready to sit down and engage in a dialogue. That is good news," said Mr Bezhuashvili.
Russia imposed sanctions after Georgia arrested and deported four Russian army officers it accused of spying. Moscow also hit back by deporting hundreds of Georgian nationals without proper residency papers.