Gazprom Will Adjust and Not Increase Gas Prices for Neighboring Countries

Gazprom does not plan any significant changes in gas prices for neighboring countries in 2008, it was announced on Thursday by the Russian gas monopoly, in an effort aimed at calming fears of new disputes over the prices of Russian gas and potential interruptions in gas supply to Europe.

"We definitely do not plan any major revisions, as all changes have already been made in the past. Now only minor adjustments are due," said Gazprom spokesman Sergei Kupriyanov. Gazprom’s statement is a response to last week’s warning from Lithuania that there could be a sharp increase in the price of Russian gas to $312-320 per thousand cubic meters, from the current $190.

Ukraine and Belarus could also face increases in gas prices, reported the business daily Kommersant on Thursday. Both countries are the most important transit routes for Russian gas to Europe, and the previous two conflicts over prices both led to supply interruptions, as Gazprom accused Kyiv and Minsk of stealing gas from the transit pipeline.

Gazprom, the world’s largest gas producer, which covers a quarter of Europe’s gas needs, sold 101 billion cubic meters of gas to the countries of the former Soviet Union in 2006, achieving a profit of about six billion dollars. Approximately 150 billion cubic meters of gas were sold to Europe, generating a profit of 37 billion dollars, and the company stated that its long-term price plan for the former Soviet states is to bring it closer to the levels charged to European countries.

Kupriyanov stated that speculation about large price increases is exaggerated but refused to comment on specific price issues. "It varies greatly from country to country," he said. Belarus currently pays the lowest price of all former Soviet republics at $100 per thousand cubic meters of gas. Gazprom threatened to cut off supplies to that country in July until it pays the debt for deliveries for the first half of 2007. The conflict was resolved after the government in Minsk covered the debt. (Hina)