As Russia doing away with the Soviet era practices completely of providing oil and gas to former Soviet republic at subsidized rates, Ukraine’s leading industries are quite skeptical to their future. The root of the problem dates back January last year when Gazprom had started playing hardball with its neighbors in order to bring the energy prices at market level. Last January, Gazprom, what was being leveled as a politically inspired move to coerce a newly elected west leaning government of Ukraine, had cutoff supplies to Ukraine. The crisis ended only when Ukraine agreed to pay $95 per thousand cubic meters. Recently, Ukraine again agreed to another gas price hike to $130, however, keeping the price well below West European levels of $230 by giving Gazprom stakes in domestic pipeline system. However, the repeat of gas crisis is unlikely as the two neighboring countries have agreed to increase the gas prices for the year 2007 that would cost them another 40 percent. In the wake of these developments ordinary Ukrainians are being hit the hardest as the cost of transportation and its impact on the prices of another articles are increasing at rapid speed. In recent times energy bills paid by the householders have been shot up by 100 percent. Therefore, these price hikes have sparked anger among ordinary Ukrainian, as the country already in the bracket of one of the poorest countries. So this time around speculations are high that Ukrainian may also refuse to pay these bills and this would result in shortage of funds for the energy companies. The crisis has cropped up in a time when cost of living in Ukraine is going higher day by day. Ukraine is one of the biggest consumers of gas in Europe. Its industry base is mainly constituted by steel and chemicals producers. These industries use high levels of gas and there are apprehensions that growing prices of gas may destroy these businesses. However, the global steel and chemical prices have remained high and stable, which till now was offsetting the gas price hike, but if there would any drop in global steel and chemical prices Ukrainian companies in all probability would face threat of bankruptcy.