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    Gazprom estimates its losses from gas Supplies to domestic market

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    MOSCOW, June 1 (RIA Novosti) - Gazprom's losses from gas supplies to the domestic market may reach 27 billion rubles (some $958 million) this year, Yelena Karpel, chief of Gazprom's department for economic expertise and price formation, said on Wednesday.

    "In 2004, Gazprom's losses from gas supplies to Russia's domestic market amounted to 5 billion rubles (over $177 million)," Karpel said.

    "If the Economic Development and Trade Ministry's proposal to raise gas prices by 11% is adopted, Gazprom's losses may reach 11 billion rubles (over $390 million) next year."

    According to her, differences in the estimates of gas prices made by the ministry and Gazprom are explained by the fact that the ministry drafted its proposals for 2006 in early 2004.

    "2004 was the year of a rise in metal (pipes) prices, so the ministry could not but take the price rise factor into account," Gazprom's spokeswoman noted.

    The adoption of the ministry's proposal to raise gas prices merely by 11% "will not lead, in particular, to the creation of energy-saving technologies," Karpel said.

    With a price rise in industry by 28.3% and in metallurgy by 66%, gas prices, in real terms, dropped by 14% in 2004, though actually they were raised by 19.8%.

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