Interfax: Gazprom seeks to raise regulated gas prices in Russia

Russian state-owned gas giant Gazprom is seeking to raise regulated gas prices in Russia to secure sufficient funds to finance investment. The Russian news agency Interfax reported this today. Gazprom is now grappling with declining foreign revenues, as Russia’s invasion of Ukraine prompted European buyers to switch to other suppliers, Reuters reported.

Gazprom posted a net loss of 629 billion rubles (over CZK 150 billion) in 2023, its first full-year loss in about a quarter of a century. The company is now seeking to offset falling exports to Europe by increasing supplies to China and other Asian countries.

Gas prices on the Russian market are regulated by the government. „The current level of regulated wholesale gas prices does not generate financial resources on a scale sufficient to carry out the necessary capital investment in maintaining and developing gas infrastructure in the interests of Russian consumers,“ Gazprom executive Alexei Sakharov said at a meeting of the expert council of the Russian parliament’s energy committee.

Sakharov also noted that Gazprom would like to retain its monopoly on pipeline exports of Russian gas. „Despite the decline in the volume of gas exports to Europe, this issue remains important in the context of redirecting Russian gas exports,“ he added.

Russia currently supplies gas to China through the Power of Siberia pipeline, which has an annual capacity of 38 billion cubic meters. It has been negotiating for several years over the construction of Power of Siberia 2, which is intended to transport 50 billion cubic meters of gas annually.

„As long-term talks with the Chinese side have shown, preserving Gazprom’s exclusive right to export gas via pipelines significantly strengthens the bargaining position of both the company and the country as a whole,“ Sakharov said.

Last week, Russian President Vladimir Putin said that Russia could eventually supply up to 55 billion cubic meters of gas a year to Iran. That volume is equivalent to the capacity of the Nord Stream 1 pipeline running from Russia to Germany, which was damaged by explosions in 2022, Reuters noted.