Russian govt scraps fines on small consumers for failure to take gas
MOSCOW. March 27 (Interfax) - The Russian government has scrapped fines on small consumers for failure to take agreed minimum quantities of gas, says a decree dated March 26, posted on the government's website.
Prime Minister Vladimir Putin said Friday at a meeting on gas sector issues in the Leningrad Region city of Kirishi that the fines should be scrapped. "It is being proposed to eliminate fines for failure to take gas for consumers whose annual gas consumption does not exceed 10 million cubic meters," Putin said.
He said this is a particularly sensitive subject for small and medium businesses, and for agribusinesses.
"The principle of take or pay has often significantly reduced the profitability of businesses, and made the development of many business initiatives unprofitable," Putin said.
He also called for the development of competition and greater efficiency in the gas sector. "We must encourage greater efficiency in the gas sector, including with the development of incentives for competition. The share of independent companies in Russian gas production has already reached 24%. And our job is to ensure common rules and standards of operation. In the end, we must establish a modern, competitive fuel market that will operate, above all, in the interests of our citizens and domestic producers, so that the rates and conditions for supplies are economically justified and do not become a burden for the consumer," Putin said.
"We have discussed this issue with the Energy Ministry and Gazprom - major consumers are capable of setting out the corresponding schedules, but small consumers don't have this ability. I believe this decision will be affirmative and it will have a positive impact," Putin said.
Businesses with annual gas consumption of up to 10 mcm include most small and medium businesses, as well as agribusinesses. Therefore, this resolution would provide support to these consumers and give them a competitive edge against foreign businesses both on the domestic and foreign markets.