Friday, January 4, 2008

Gazprom Raising Natural Gas Prices for CIS Countries to Western European

VILNIUS, Jan 2 (Reuters) - Russian gas monopoly Gazprom is set to more than double the price of natural gas for Lithuania in 2008 from a year ago, Baltic news agency BNS said on Wednesday.
Analysts have said the increase in gas prices could push the consumer price index, which hit a 10-year high of 7.8 percent in November, to double digit levels this year.
Lithuanian gas utility Lietuvos dujos, 38.9 percent owned by E.ON Ruhrgas and 37.1 percent by Gazprom, will pay 833 litas ($354) per 1,000 cubic meters (tcm) of imported natural gas as of January, BNS said.
A Lietuvos dujos spokeswoman declined to comment on the reported price rises, as the agreement on the gas supplies has not been signed yet.
Gazprom was not available for comment.
The gas price for industrial users will be linked to the world price of heavy fuel oil and is to be reviewed each month as set in a three-year agreement, BNS said.
Lietuvos dujos has already said that residential users will pay a fixed price for a whole year. The price is to rise by average 71 percent from last year.
Lietuvos dujos paid Gazprom a discount price of 316 per tcm in the first quarter 2007, an official at the state energy price commission told Reuters. He said the commission expected average import gas price in the first half of 2008 to be 885 litas.
Gazprom has been trying to move all its former Soviet customers to western European prices, which have been around $260 per 1,000 cubic metres and which Gazprom has said will be around $350 in 2008.
Lithuania, like its Baltic neighbours, is completely dependent on Russia for gas, though the whole region accounts for only a small part of Gazprom's exports at 4.9 billion cubic metres in 2006, compared with a major customer such as Ukraine at 59 bcm. (Reporting by Nerijus Adomaitis; Editing by Louise Ireland)

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