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11

Gazprom Increased Gas Price for Europe

Gazprom will sell gas to Europe at the price of over $300 per ths cu meters

Gazprom will be selling gas to Europe at the price of over $300/ths cu meters in late this year, i.e. $50 above the average European price calculated on border of Poland and Germany. Of all European states, Romania was the first to complain, Kommersant reported.

By late this year, Romania will be paying over $300/ths cu meters for gas imported from Russia (today?s price is $285), The Money Channel reported referring to Codrut Seres, minister of economy and commerce of Romania. Seres said the price could be $305 or $310.

It is not just a high-ranked official of a European state specified the price deemed a trade secret. It is that Seres forecasted the time when the ceiling of $300 will be ultimately hit.

Romanian Economy and Commerce Ministry, state-run SNGN Romgaz SA and Gazprom didn?t comment yesterday.

Nevertheless, Romania has certain advantage over the neighbors, as the local production meets 60 percent of the country's consumption. But other states of Eastern and Central Europe are less lucky. Bulgaria, Poland, Czechia, Slovakia and Hungary depend on Russia?s gas in part and in whole. And hiking the border prices to $300 will drive up the prices on their markets.

The situation will be even tougher for CIS. Unlike Western Europe, where gas accounts for 25 percent to 30 percent of the fuel and energy balance, or Eastern Europe, where gas covers 30 percent to 40 percent of it, CIS has from 50 percent to 70 percent on average. Moreover, Ukraine and Belarus have almost completely shifted their power grids to gas in the recent years and the reference price of $300/ths cu meters is bound to threaten competitiveness of their goods.