Gazprom hints at significant price increases for Balts, CIS countries

  • 2005-11-30
  • Staff and wire reports
RIGA - The Baltic states received yet another warning that Russia's Gazprom was intent on raising gas prices from $80 to $120 's $125 per 1,000 cubic meters for the three countries.
Alexander Ryazanov, deputy chairman of the company's management committee, told a conference in Moscow that prices would also rise for Armenia, Georgia and Moldova. Earlier reports suggested the Kremlin would also sign new contracts with Ukraine.

But the prospect of a 50 percent increase, which may not occur all at once, has Baltic energy officials in a sweat. In Lithuania, the government is considering measures to soften the blow on private and corporate users.

Precise measures will be worked out as soon as the government obtained Gazprom's proposals for 2006, said Economy Minister Kestutis Dauksys. However, the measures could include a cut in the gas suppliers' surcharge and the review of gas transportation tariffs, he added.

"If the prices proposed by Gazprom are too significant, we would think of ways to offset the increase somewhat. If the prices are acceptable, we could respond to the request of Gazprom," Dauksys noted.

Lietuvos Dujos, a gas importer, has projected that the prices of gas acquired from Gazprom by the company could surge by 40 percent.

Gazprom, the owner of approximately one-third of Lietuvos Dujos, has repeatedly warned that the price of gas to the Baltics would be raised to average EU levels if Lithuania failed to modify its pricing decisions, expand the category of large industrial users and offer any guarantees, etc.

Valdas Lukosevicius, a member of the National Control Commission for Prices and Energy, said any steep hike would undoubtedly lead to an increase in natural household gas bills. He said households using gas for cooking would face a 20 - 30 percent rise in prices, while those using gas for heating could see costs soar 30 percent.