Increasing gas prices to European level should ensure investment effectiveness - Gazprom management
MOSCOW. Oct 7 (Interfax) - One of the ways of raising the efficiency of Gazprom's investment program would be an increase in gas prices to the European level, the Russian gas giant said.
The company's managing committee convened on Thursday and determined the main areas for boosting investment efficiency.
The committee set the following areas as key for boosting Gazprom's efficiency with its investment program: optimization of plans to commission new capacity, raising the economic efficiency of investment projects by optimizing technical and cost measures for construction projects when conducting expert analysis of project documentation.
Furthermore, the committee calls for reducing the costs of implementing investment projects by optimizing prices on key technical and material resources and holding tender purchases of commodities, operations and services, as well as monitoring the realization of investment projects. They also came out in favor of continuing to work with federal executive bodies in order to bring oil prices to a level, which would ensure, firstly, funds on hand for financing investment necessary for the gas sector's function and development, and, secondly equal revenues from gas supplies to both foreign and domestic markets. They also call for expanding project financing methods in the implementation of Gazprom's investment projects.
This issue has been put forward for review by Gazprom's board of directors.
Russian officials have long sounded the position that gas prices in Russia should increase to the level sufficient for ensuring that revenues are equal to those made from export. In other words, gas prices should reach the same level as Europe excluding customs duties and transport costs. The state has tried to index gas prices at 15% a year, which is almost double the rate for natural monopolies (inflation level). However, world prices for energy resources have been increasing at a faster rate and a move to equalization of domestic and export revenues has been constantly delayed. Gas prices in Russia were initially slated for liberalization at the start of 2011 but this date had been moved against to 2014 and, later, to 2015.
Now gas prices vary from region to Region, between $52 and $119 per 1,000 cubic meters. However, the price for supplying Gazprom gas to Europe has already topped $450.
However, independent suppliers in various regions sell gas at lower prices than Gazprom's regulated rate. However, the gas giant continues to insist on a new price increase.