25 Mar 2022 16:59

Gazprom to simulate long-term development of independent producers, proposes to 'equalize' tax and social burden

MOSCOW. March 25 (Interfax) - Gazprom will simulate the long-term financial and economic development of Russian independent gas producers and formulate proposals to equalize the tax and social burden with them.

Gazprom said in information that it had ordered from a sole supplier the compilation of a scenario forecast for the development of independent gas producers using economic and mathematical modeling in order to reflect the performance indicators of these companies in the long-term planning of the development of the gas industry and of Gazprom itself. The cost of the contract is 18.353 million rubles and the work should be ready in October 2023.

Gazprom has also ordered theoretically substantiated proposals for improving the domestic gas market from the point of view of equalizing the tax and social burden of Gazprom and independent gas producers. The cost of this sole source contract is also 18.353 million rubles. The work should be ready in October 2023.

The government-approved General Plan for the Development of the Gas Industry in the Period to 2035 sets tasks to improve state regulation of gas prices, to elaborate the system of tariff formation for gas transportation to achieve an economically justified level of regulated tariffs, and to develop and implement market mechanisms for compensating producers and/or gas suppliers with increased load during the peak utilization of the gas supply system in the autumn-winter period, and other tasks. Thus, Gazprom is starting to draft its own proposals for improving the domestic gas market.

Gazprom has been paying significantly higher mineral extraction tax than independent gas producers since 2012. It also bears the burden of maintaining the technical condition and development of the gas transportation system, and managing the risks of uneven gas consumption by creating standby capacity to cover peak demand in the autumn-winter gas consumption peaks. Gazprom is carrying out an extensive gasification program with an estimated budget of 2 trillion rubles to 2030.

As well as a reduced tax burden, independent producers also have the advantage of being able to work with the most attractive Russian consumers, which has allowed them to increase the volume of supplies to domestic consumers considerably. Independent producers supply gas to premium industrial consumers with a stable consumption profile, while Gazprom is left with consumers with a high level of uneven consumption - households and public utility providers, lower payment discipline. The share of deliveries by independent producers is growing primarily thanks to consumers in highly profitable areas, and large and solvent buyers.