According to a government official who plans to launch next month, Russia may allow domestic natural gas giant OAO Gazprom to increase domestic natural gas prices by 15% next year, while other monopoly gas prices may only increase in line with inflation.
A 15% increase in natural gas prices will be consistent with the original plan of liberalizing the monopoly price, which has been funded since the Soviet period. Prime Minister Vladimir Putin ordered the government to consider natural monopoly tariffs to limit the inflation rate. However, this plan has been shelved earlier this year.
The liberalization of domestic prices is one of the main drivers of the market share of Gazprom and OAO Novatek, Russia’s largest independent natural gas producer.
Government officials said that the plan still needs the approval of the Ministry of Finance. The plan envisages that natural gas prices will increase by 5% from January 2012 and further increase by 9.5% from April 1, equivalent to an annual increase of 15%.
Moscow industry sources said: "The rise in natural gas prices clearly reveals that the government intends to keep domestic natural gas prices up."
Gazprom's shares on the Moscow exchange reached 0.9% to reach 173.6 rubles ($6), while the overall Micex index closed up 1.2%.
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