EUROPE TO SEE 14% PRICE INCREASE IN RUSSIAN GAS IN 2007
Deutsche Presse-Agentur, 29 November 2006
HYPERLINK "http://news.monstersandcritics.com/business/article_1226550.php/Europe_to_see_14_per_cent_price_increase_in_Russian_gas_in_2007" \o "Open URL: http://news.monstersandcritics.com/business/article_1226550.php/Europe_to_see_14_per_cent_price_increase_in_Russian_gas_in_2007" \t "linkWin" http://news.monstersandcritics.com/business/article_1226550.php/Europe_to_see_14_per_cent_price_increase_in_Russian_gas_in_2007
Moscow - Europe is to pay Russia's Gazprom 293 US dollars per 1,000 cubic metres of natural gas in 2007, a 14 per cent increase over current prices, the daily Vedomosti reported Monday.
The price would provide the Russian government-controlled monopoly with 46 billion US dollars in income from Europe, the paper reported, citing documents prepared for the gas giant's board of directors that it said it had obtained.
Gazprom supplies one-quarter of Europe's natural gas. The company plans to export 157.8 billion cubic metres to Europe next year, compared with 151 billion cubic metres this year.
Amid 2006's record-high gas prices, the continent currently pays 257 dollars per 1,000 cubic metres of the fuel.
An unidentified Gazprom official said the hike was based on the company's calculations for the market price of gas through mid-2007.
Moscow-based investment bank Deutsche UFG, a subsidiary of Germany's Deutsche Bank, forecast lower commodities prices next year, however, noting crude oil prices had sagged to 60 dollars per barrel, down from the summer's 75 dollars.
Both Deutsche UFG and Russian bank Troika Dialog called the pricing policy 'aggressive' in research notes released Monday. Deutsche's own forecast for the gas behemoth's 2007 prices is 255 dollars per 1,000 cubic metres.
Gazprom spokesmen have refused official comment.
The report comes as the West has grown concerned about Russian energy policy.
Recent plans to begin negotiations on a new EU-Russia Cooperation and Partnership Agreement fell through due in part to Polish demands that Russia sign the bloc's Energy Charter Treaty, which would liberalize Russia's gas network.
Europe has rushed to begin work on the new agreement as a means of codifying Russia's commitment to energy security and stability.
After Moscow cut supplies to Ukraine and its then pro-Western government in the dead of winter earlier this year, many have begun to fear the Kremlin is using Gazprom as a foreign policy tool.
While Russia has traditionally kept gas prices for its ex-Soviet neighbours lower than those it charges Western Europe, Gazprom has announced intentions to double prices for Georgia, a country whose anti-Russian government has irked the Kremlin in recent months.
The price rise also comes as Russian President Vladimir Putin vows domestic gas prices will remain relatively unchanged until after 2008, when presidential elections will determine his successor after the Russian leader's second and constitutionally last term ends.
Russia's domestic consumers pay 40 dollars per 1,000 cubic metres. Prices are expected to rise 15 per cent next year, much less than the 100 per cent hike Putin's economic advisers have called for.