Russia behind hike in gas prices

  • 2006-11-29
  • From wire reports
TALLINN - The Russian natural gas monopoly, Gazprom, will raise the price of gas sold to the Baltic states to $210-260 (160-199 euros) per 1,000 cubic meters next year, depending on the country. Estonia will be paying the highest price.

The Russian business newspaper Kommersant reported on Nov. 27 that Gazprom was going to raise the price of Baltic gas to the average European level. A representative of the gas company confirmed the price hike, but did not disclose exact figures.
The head of distribution services at Estonian Gas, Raul Kotov, told the newspaper that $260 dollars per 1,000 cubic meters of gas sold to Estonia would be the most likely price.

It is not yet possible to name the exact gas purchase price for 2007, as it will change along with the price of heavy fuel oil, Kotov told the Baltic News Service.
Kotov confirmed that the coefficient price pegging between gas and heavy fuel oil was going to change, although reluctant to say by how much.
According to Kotov, Estonian Gas and Gazprom are constantly in talks over a number of topics, such as supply schemes and other issues.

There have been reports in the media that, due to a rise in purchase price, Estonian Gas is going to raise the price of natural gas for retail clients by 10 percent in October 2007. Kotov said this was a likely scenario.
"It will be clear in the first half of next year how much more retail consumers will have to pay for gas and Eesti Gaas will inform clients about this in accordance with the contracts concluded," Kotov said.

The price of gas that Gazprom sells to Latvia will shoot up by more than half next year to $220 and the price of gas sold to Lithuania will increase by around 30 percent to $210-230 per 1,000 cubic meters, Kommersant said.
The cost of gas for end consumers in Estonia rose sharply at the beginning of October and the new prices will stay in effect for a year.

Next year, Gazprom plans to charge $293 for 1,000 cubic meters of gas sold for export, a rise of $36, the newspaper Vedomosti reported.
However, in Estonia the price of gas is to rise by 15 percent to an average of $49 dollars per 1,000 cubic meters, according to Gazprom's 2007 budget.

In comparison, Gazprom predicts that Belarus will pay $200 dollars for 1,000 cubic meters of natural gas next year as compared with $46 dollars on average this year. However, no agreements on such a hike have been officially signed.