Gazprom insists on increasing gas prices to achieve profitability

In order to achieve profitability, Gazprom needs to raise the price of gas to $24-25 per 1,000 cubic m, Alexander Krasnenkov, the head of Gazprom's Department of Property Management and Corporate Relations, declared at a meeting with Gazprom shareholders in Kazan today. According to him, the price of gas may be increased by 20 percent in Russia in 2004. Gas prices were increased twice (by 20 percent and then by another 15 percent) in Russia in 2002. The price of gas for individual consumers was raised by 20 percent in April 2003. At has been decided at a government meeting recently to increase gas prices by 20 percent in 2004. This increase in prices is to guarantee profitability for Gazprom, Krasnenkov remarked.

283.5bn cubic m of gas were supplied to consumers in Russia via backbone gas pipelines of Gazprom in 2002. The volume of gas export to Western and Easter Europe was 128.6bn cubic m. The volume of has supplies to CIS and Baltic countries was 42.3bn cubic m. 34.2bn cubic m of natural gas were processed at plants owned by Gazprom's subsidiaries. The arrears of Russian consumers for gas decreased by RUR3.7bn ($121.07m) to RUR38.5bn ($1.26bn) in 2002.

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