Gazprom Wants to Edge Natural Gas Prices toward USD 60 per Cubic Meter

The outside limit on domestic Russian sales of natural gas should be in the range of USD 59-60 per cubic meter, Aleksandr Ryazanov, Gazprom's deputy managing chairman, declared Monday at a press conference here. Currently, gas sells on average in Russia for approximately USD 23 per 1,000 cubic meters. 'We are not seeking a one-time price rise but have proposed a plan to move gradually from a controlled to a free market,' Ryazanov said. 'We anticipate that a cubic meter of gas will be selling at USD 40-41 by 2006.' According to Ryazanov, the government's current stringent policy stands in the way of developing intra-sector competition. Users, he said, clearly prefer to buy natural gas, which is less costly, environmentally cleaner and technologically more adaptable than coal or oil. Nonetheless, he asserted, Russia's Economic Development Ministry has been doing all in its power to hold back development of a competitive market in natural gas production. 'The result is that we are forced to sell gas at a loss at the fixed price even to new customers, including to companies owned by foreign capital,' Ryazanov said.