03:18 GMT +310 December 2018
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    Gazprom delays free domestic gas market for another year - company official

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    MOSCOW, June 1 (RIA Novosti) - Domestic market for gas will not become free in 2006, a senior official in Russian gas monopoly Gazprom told reporters today.

     "The development of gas market is delayed for another year," Gazprom deputy chairman Alexander Ryazanov said as he announced that the company received a letter from Viktor Khristenko, Russia's industry and energy minister, saying that another joint working group should be created on the issue of free-priced gas.

    This means, Ryazanov said, that all gas issues will be decided late this year.

    The government is divided over free prices for natural gas, he said, citing the Economic Development and Trade Ministry's concerns that free gas market could increase inflation.

    "Our calculations, meanwhile, suggest [the inflation] will be well below these fears," he said.

    However, he said, Gazprom was still regarding an experimental session of free-priced distribution of gas between enterprises as a possibility.

    "I will try to have such an experiment held," he said.

    He added Gazprom had a trading platform for gas produced by independent Russian companies and procured by over 500 small consumers.

    "So, we do have expertise on gas trading, and we are ready to translate this expertise into a trading platform. We think that this platform will be independent of Gazprom," Ryazanov also said but warned that major consumers, such as RAO UES, the electricity monopoly, "will, of course, sign long-term agreements on gas supplies."

    According to Ryazanov, Gazprom has sent its proposals to the Economic Development and Trade Ministry and to the Industry and Energy Ministry, but the government is stuck.

    Russian domestic gas price is a key obstacle on the way to its accession to the World Trade Organization. Russia disagrees to demands of some European countries to raise its internal gas prices to make energy in Russia cost as much as it costs internationally.

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