№ 7 (July 2007)
Gazprom Eyes More Price Hikes
Russian gas monopoly Gazprom is set to start negotiations with the Baltic countries, as well as with Ukraine and Belarus regarding new gas price increases expected to come into effect in 2008 bringing them closer to what Western European countries pay for Russian gas.
Russian newspaper Kommersant reported Gazprom insisted there would be no major revisions, instead just fine-tuning the current prices.
Gazprom has already increased the gas prices for Lithuania to $280 per 1000 cu meters, a 40% hike from the current $200. Talks with Latvia and Estonia are reportedly set to begin in September. According to Kommersant’s sources, Russian state-owned gas giant will be able to kick off negotiations with Ukraine only after fixing purchase prices with Turkmenistan, Uzbekistan and Kazakhstan later this year while talks with Belarus will happen no sooner than in October.
Gazprom’s previous decisions to hike prices for Ukraine in 2005 and Belarus in 2006, which happen to be important transit countries, had serious ramifications for the company temporarily destabilizing supplies to Western Europe.
According to Reuters, Gazprom sold 101 billion cu meters of natural gas to the CIS and Baltic countries in 2006 earning $6 billion. In comparison, the earnings from selling 150 billion cu in Europe amounted to $37 billion.