Russian Deputy Economic Minister Sharonov Cites Ministry Proposals on Gas Market Reform
CEP20021218000254 Moscow Kommersant in Russian 18 Dec 02 P20
[Interview with Andrey Sharonov, Deputy Minister of Economic Development and Trade of the Russian Federation, conducted by correspondent Irina Rybalchenko: "Interview. Andrey Sharonov, Deputy Minister of Economic Development and Trade;" place and date not given--taken from html version of source provided by ISP.]
[FBIS Translated Text]
Interview. Andrey Sharonov, Deputy Minister of Economic Development and Trade: "There will be no price leaps."
[Correspondent] The government is planning to discuss liberalization of Russia's gas market. What is Minekonomrazvitiye [Ministry of Economic Development and Trade] proposing?
[Sharonov] One of Minekonomrazvitiye's main proposals is the development of the system of trade relations. Today, the gas market is a super-monopolized sphere of activity. Gazprom takes up a gigantic share of this market--over 90 percent. The remaining 10 percent are comprised primarily of isolated gas systems, where there is no Gazprom, but there is also no competition. We are proposing to create an unregulated sector of gas trade already as of next year, with the mandatory participation of independent producers, so that they would have a real opportunity to pump their gas through the Gazprom pipeline. Furthermore, Minekonomrazvitiye is proposing to introduce separate regulation of tariffs on pumping gas for all market participants, including for Gazprom, as well as gradual liberalization of prices on gas. At the same time, the rates of liberalization must be different: The socially sensitive group of consumers (housewives, public-sector enterprises and organizations) must be guaranteed a more gradual increase in prices, while industrial consumers and power producers would have to change over to market principles at a faster pace. We have already sent out the draft document to all of the ministries and departments of this profile: Minenergo [Ministry of Energy], MAP [Ministry on Antimonopoly Policy], FEK [Federal Energy Commission], Minfin [Ministry of Finance] and Minimushchestvo [Ministry of Property Relations], as well as to Gazprom itself, with which we had performed constant coordination.
[Correspondent] What was Gazprom's reaction?
[Sharonov] As yet, I do not know Gazprom's final reaction, but I can say that they were not entirely in agreement with us. Gazprom is speaking out in favor of integrity of the company's structure. But we, in the course of our in-house consultations, placed the main emphasis on analysis of resources and potential of Russia's gas market, the system of trade relations, the existing taxation, state regulation, and the ratio of supply and demand. In other words, we want to clearly demonstrate that the objective prerequisites for reorganization do exist. It is specifically such an analysis that brought us to the need for transformations. Aside from this, we also relied on foreign experience. Today, the question of reforming the natural monopolies has affected practically everyone: Europe is speaking out in favor of liberalization of the markets in gas and electrical energy, and in the USA these reforms were implemented not too long ago.
[Correspondent] You said that the creation of market conditions would lead to growth of tariffs on gas. Does this mean that there will be a drastic price leap already as of next year?
[Sharonov] There will be no [price] leaps. We cannot and should not implement reform in such a way as to put all of the gas consumers in Russia on the brink of bankruptcy. But we must develop a strategy of gradual increase, which would take place over the next 2-3 years.
[Correspondent] Independent gas producers insist that today they are not interested in export of gas, due to the overly high transport tariffs. They are prepared to meet Russia's domestic demands, which fully corresponds to the interests of Gazprom--it would be able to export more gas. But for this, they are asking that gas prices be increased by an order. To what degree is this possible?
[Sharonov] Independent producers cite the threshold of entry into the market at $30-$35 per 1,000 cubic meters. Our position consists of making the domestic and foreign gas markets equally profitable. For now, this is rather hard to do, because we must ensure access by independent producers to export according to the principle of proportionality of production. At the same time, we are speaking out in favor of retaining a single exporter, so as not to create competition between sellers of Russian gas on the foreign market.
[Correspondent] That is, the structure of Gazeksport-- the Gazprom operator for sale of gas on foreign markets--will be retained?
[Sharonov] I will not take it upon myself to say which organization will deal with export questions in the future. For now, I can only presume that, in the nearest time, everything will remain as it was before. That is, Gazeksport will be the operator for export deliveries. The main thing is to provide the independent producer with the opportunity to export gas.
[Description of Source: Moscow Kommersant in Russian -- Informative daily newspaper purchased by Boris Berezovskiy in 1999 and often reflecting his viewpoint.]
Russia: Fedorov says liberalization remains major problem for Gazprom
CEP20020628000144 Moscow Interfax in English 1133 GMT 28 Jun 02
[FBIS Transcribed Text]
MOSCOW. June 28 (Interfax) - Liberalization of the market for Gazprom shares still remains one of the most important and pressing tasks for the gas monopoly, Boris Fyodorov, who was elected to the company's board at the annual shareholders' meeting, said.
In an interview with Interfax on Friday, the described the situation on the market for the company's shares as "inadmissible."
"The Russian president more than a year ago gave investors a certain advance and set up a special commission that reached come conclusions. However, the government did not move one centimeter towards liberalization in this time," Fyodorov said.
He also stressed that the second most pressing problem for the gas monopoly is tariff policy.
"There should be no revolutionary measures in this area, however the government needs to realize that delays in reaching a decision harm both Gazprom itself and the federal budget. The government, together with Gazprom, needs to establish how to bring gas tariffs into line with other sources of energy over several years, without any shocks," the Gazprom board member said.
Commenting on the results of the Gazprom shareholders' meeting, Fyodorov said that he is satisfied.
"I am satisfied with the results of the meeting, which were not unexpected for me. I think that company management will continue all the undertakings announced earlier and, in particular, will continue to return illegally removed assets," he said.
[Description of Source: Moscow Interfax in English -- non-government information agency known for its aggressive reporting, extensive economic coverage, and good coverage of Russia's regions]
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