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Gazprom wants to raise Russian gas prices

Gazprom has suggested indexing additionally its prices – by 26.3 percent from October 1, the Vedomosti writes

MOSCOW, March 20 (Itar-Tass World Service) —— Gazprom has suggested indexing additionally its prices – by 26.3 percent from October 1, the Vedomosti writes. If the government agrees, by the yearend gas will cost 137 dollars for 1,000 cubic metres.

The newspaper learned about the request from two federal officials. The current plan of the government, which was adopted late past year, plans indexation of the concern’s prices by 15 percent from July 1 /in the beginning of the year the prices were not raised, which was based on the desire of the power to slow down the inflation rate/. But Gazprom suggests making another raise – by 26.3 percent from October 1 for all clients, except for the housing maintenance and private consumers, sources of the Vedomosti said.

Thus, the annual price will be by about 17 percent higher than that of the previous year – this is the way Gazprom wants to compensate for the doubled tax on extraction of natural resources, introduced from beginning of the current year, the officials said. Gazprom’s additional indexation of prices is to be a subject of discussion.

In February, Gazprom calculated its losses from raised tax on extraction of natural resources – 64 billion roubles: the indexation of Russian prices will bring 50 billion in additional revenues. Gazprom is not seeking additional benefits – only compensation of lost revenues, the concern’s staff said, and all suggestions were based on the government’s order to work on the issue.

With the indexation suggested by Gazprom, by the yearend the average Russian price will be about 4,000 roubles for 1,000 cubic metres VAT exclusive, or 137 dollars by the current exchange rate. This is by 45 percent more than now, or almost twice more, than for example exchanges’ rates for gas in the US /now, about 71 dollars calculated against Russian standards/, Director of East European Gas Analysis Mikhail Korchemkin said.

The presidential election is over, and the government does not have any obstacles for raising gas prices, Korchemkin said: of course, businesses will not be happy, especially the energy sector, but Gazprom’s investment programme is above all, especially following the order to speed up construction of the South Stream gas pipeline, which is worth many billions.

Gazprom’s suggestion is a catastrophe, an expert of an energy holding said with indignation: the companies, which main assets are thermal power plants, have been working already on the brink of profitability. Gazprom suggests a too high growth of tariffs, and energy companies would not be able to afford them, as their prices are indexed within inflation only, Director General of the Council of Energy Producers Igor Mironov said: following this growth of Gazprom’s tariffs, the electricity price will grow by the yearend by 17-18 percent.