Energy Minister comments on coal industry

The government plans to introduce a market mechanism of coal pricing in2006, Russian Energy Minister Igor Yusufov declared today after a meetingof the State Council devoted to the development of the coal industry.According to him, the government is elaborating on a program of a gradualincrease of domestic gas prices to the level of $40-45 for every 1,000cubic meters of gas by 2006. The Energy Minister pointed out that theadvance in gas prices would promote a demand for coal.At the same time Yusufov stressed that domestic industrial enterprises,first of all energy enterprises, would consume more coal, in the eventtheir gas oriented energy generating facilities were transferred to coal.According to the Minister, a number of anti-monopoly measures in theRussian "coal" regions may promote a decrease in coal prices. Inparticular, these are the creation of coal exchanges and limits on thepresence of coal companies on the market to 30-35 percent, Yusufovspecified.The Energy Ministry noted that obligatory furnace oil supplies to thedomestic market were necessary only for the Far Eastern regions. Theintroduction of the same practice throughout Russia may lead to anoverproduction crisis, he added..

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