Gazprom calls for significant rise in gas prices

Gas prices for industrial consumers should be raised by at least 40 percent and prices for residents should be increased by 20 percent, the Russian natural gas giant Gazprom reported. Its experts believe this will allow Gazprom to decrease expenses and provide the minimal necessary volume of investments within 188bn rubles (about $5.9bn). Moreover, this increase in prices would cut back the deficit of funds in the parent company to 5.5bn rubles ($173m) with the volume of external borrowings at 120bn rubles ($3.77bn).

The company is sure that a 20 percent rise in wholesale gas prices will not provide normal terms for maintaining gas production at 530bn cubic meters a year over the next several years. Furthermore, this insignificant rise in prices will result in losses from gas sales on the domestic market of 5.7bn rubles ($179m).

Gazprom's profit from sales on the Russian market is expected to reach about 18bn rubles ($565m) in 2003.

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