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Gas wholesale price rise fails to cover Mol's purchase costs in H1 2006

Oil and gas company Mol Rt said on Wednesday that an average 10% rise in gas wholesale prices on January 18 will not cover its gas import costs in the first half of 2006 if the price of imported gas and foreign exchange rates develop in line with expectations. In an announcement published on the stock exchange website on Wednesday, Mol said that it expects the gas wholesale price of natural gas to rise on average by 10% as of January 18 next year based on the new wholesale and end-user prices set by the Minister of Economy and Transport. The gas price increase has been triggered by a continuous increase in the price of imported gas and the strengthening of the US dollar against the forint. At the same time, Mol said that changes announced in natural gas price regulation, to be in force until 31 December 2009, will make price regulation more transparent than earlier. Under a decree of the Minister of Economy and Transport issued parallel with Q1 changes in regulated gas prices, regulated gas prices will be set on a quarterly basis in contrast to the current half-year price setting period, which will allow prices to follow more flexibly developments on the market, Mol said.
The new decree also changed the regulated return in transmission to 6.9% from the earlier 8.5% and to 8.4% from 10 in storage serving public utility supply, Mol said. The new regulation also introduces as a new element a 0.5% return on the cost of goods purchased for resale in the case of Mol's wholesale, marketing and trading unit Mol Földgázellátó, parallel with a change in system access tariffs in transport and storage. The new transport and storage tariffs already reflect the new returns defined by the ministerial decree, Mol noted. The Ministry of Economy and Transport announced on Tuesday that end-user gas prices for businesses and institutions will rise by an average 8% on January 18. Public institutions will be compensated for the price rise by increased budget support calculated in next year's budget support to public institutions. It was earlier announced that the gas price will remain unchanged for households.