Gas exports to Europe have fallen fourfold: Gazprom is asking to raise domestic prices in the Russian Federation
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“Gazprom” asks to “release” domestic prices for industry in the Russian Federation in order to increase revenues from the domestic market against the backdrop of a four-fold drop in exports to Europe.
This is reported by the Russian Merchant with reference to the materials of the meeting of the State Council on Energy.
Gazprom is asking the government to liberalize wholesale gas prices for industrial consumers, introduce seasonal differentiation of wholesale gas prices and launch a commercial balancing system.
This idea was expressed at the meeting by Vitaly Markelov, Deputy Chairman of Gazprom. He noted that Russia’s gas industry “should shift its focus from an export-oriented model to the domestic market.” It is proposed to start with several pilot regions.
The population and utility consumers account for about 19% of the total consumption in the country, respectively, more than 80% – industrial consumers.
Currently, private Russian gas producers, such as Rosneft and NOVATEK, can offer price discounts and thereby entice large consumers. Instead, Gazprom works according to the tariffs established by the Federal Antimonopoly Service (FAS), in particular in those regions where the tariff does not cover costs.
Private gas producers previously argued that before introducing free domestic prices, it is necessary to liberalize access to exports and introduce transparent tariffs for transportation of Gazprom’s HTS. But now the question of access to exports to Europe, after its fall by almost four times, has become less relevant.
In recent years, Gazprom has increased its production capacity to approximately 560-580 billion cubic meters per year, but due to the drop in exports against the background of the full-scale invasion of the Russian Federation in Ukraine, the company’s production fell by 20% last year, to 412.6 billion cubic meters.
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