Independent producers will pay Gazprom more

Energy Trade

Gazprom is proposing a 20-40% price increase for independent natural gas producers transporting gas on trunk pipelines. A 20% price increase would raise the price for the final consumer by 1-5%.%. The Federal Tariffs Service has not yet approved the idea.

Experts say the independent producers can survive the additional expense, but only if the tax hike on mineral use is postponed to 2009. Gazprom has confirmed that it has filed papers with the tariff service for the price increase. “Reexamination of the tariff for independent producers, just like the prices for the transport of gas for enterprises of the Gazprom group, goes on regularly to guarantee financing for the reconstruction, modernization and technical diagnosis of the facilities of the natural gas transport system,” Kommersant was told by the Gazprom press service. The price of transport for independent gas producers has risen 15% since March 1 of this year. The Federal Tariffs Service has not yet decided when it will make a decision on Gazprom’s application.

Deputy head of the gas department of ZAO Trans Nafta Alexander Filippov said that any rise on transport prices will effect the customer price. He noted, however, that natural gas prices remain low in comparison with other fuels, and Gazprom wants to strengthen its position. Industry sources say that the price of transport makes up 5-20% of the overall price of gas, depending on the distant of transport.

NOVATEK press secretary Mikhail Lozovoi called the price increase “logical.” He noted that “The liberalization begun on the gas market is oriented toward reaching equal income from the sale of gas on the domestic market and on the export market and suggest the formation of comparable dynamics to reach average European indicators for the tariff on the transport of gas,” he explained. (kommersant.com)

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