Unified gas pricing. Remedy for Russian gas sector?

摘要

Domestic natural gas prices remained below long-run marginal costs for more than decade after Russia moved towards market economy in 1991. Low domestic gas prices were supposed to stimulate Russia’s economic growth after the collapse of the planned economy. The reverse side of this policy became a high growth of domestic natural gas demand, low efficiency of energy use and heavy underinvestments in the gas sector. During the last decade Russian gas demand grew faster than the production of Gazprom – the state-controlled gas company, which in 2007 produced around 85% of all Russian gas production. As result the ability of Russian gas sector to meet future growing demands by both domestic and foreign consumers come under question, see e.g. Milov (2005), IEA (2006), and Goldthau (2008). The concerns that future Russian gas supply will have difficulties in matching demand forced Russian government to hasten increase of the domestic gas tariffs. In Mai 2007 Russian government passed a decision that allows Gazprom to sell gas in Russia at so-called unified gas prices already in 2011. Unified pricing refers to equalizing gas price in Russia to gas price in Europe after adjusting for export duties and transportation costs. In the years before 2011 domestic prices be will gradually increased in order to reach netback level in 2011. The announced pattern of the price growth until 2011 and the following introduction of unified prices show that the future price increase will be more radical than the Russian government projected earlier (Energy Strategy, 2003). A significant rise of the domestic gas price is hoped to be a measure that will help Russia to avoid the gas deficit. High gas prices are expected to reduce growth of domestic gas demand, increase investments into the sector and stimulate to more gas production. In addition, prospects for the structural reforms in the Russian gas sector can also be affected by the new gas pricing policy. The structural reforms that would bring more competition and reduce Gazprom’s dominance in the Russian gas industry were intensively debated in Russia already since 1997. The common consensus in the debate, however, was that domestic price increase should precede the structural changes in the sector (e.g. Locatelli (2003), Stern (2005), Ahrend (2005)). As long as the Russian government kept gas prices low, the dominant position of Gazprom in the Russian gas industry secured that domestic demand could be satisfied at these prices. In order to cover losses from the domestic sales by high export profits Gazprom was provided an exclusive right to export Russian gas. But after the domestic gas price is considerably raised the most important justification for Gazprom’s dominance will be eliminated and the conditions for the structural changes might be more favourable. In addition, it is argued that availability of capital investments is an important precondition for successful reforms in the network sector. Shift towards unified prices is expected to raise the flow of the capital investments into the Russian gas industry.