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'Sink or swim' - Gazprom tells Russian consumers

Russian consumers of gas will soon pay the same price as their overseas counterparts. The issue was discussed at 5th Gas Forum.

Last year the government adopted a law that will raise national prices to export level by 2011. Russian consumers will benefit only from transportation costs.

Prices are rising even now with the Federal Tariff Agency pushing the market to make the transition smoother.

“If we had a market-level price today, the gas would have cost $US 110 per cubic metre and customers are paying half that price,” said the President of Russian Gas Society, Valery Yazev.

New customers of Gazprom are already paying market level prices.

Moreover, Europe has for some time demanded that Russian industry pay as much for gas as European businesses do. The EU is blaming Russia for unfair competition.

Some specialists say that the Russian economy will stumble as a result of high gas prices.

Others believe it will eventually be necessary to have the same export and domestic prices, otherwise Russian dependence on gas will be too high.

Alexey Makarov, Director of the Energy Study Institute, says the rising prises will encourage the market to “enhance energy saving and substitute gas with other energy sources” to avoid over-dependence on gas.