| FAS proposed the concept of gas market reform, ahead of Gazprom and the Ministry of Industry and Energy The Federal Antimonopoly Service again crossed the path of Gazprom. Igor Artemyev’s department developed a draft government decree “On the development of the gas market of the Russian Federation,” which was sent to all interested parties. The document provides for the start of liberalization of gas prices for industrial consumers from January 1, 2007. And its completion will not occur earlier than in six to seven years. In addition, the FAS proposals postpone for at least a year the implementation of one of the most beloved projects by Gazprom management - an experiment in the sale of 5 billion cubic meters of gas by the monopoly at free prices. The concern is dissatisfied with the activity of the FAS. As Vremya Novostei learned, Gazprom and the Ministry of Industry and Energy jointly developed a new version of the draft government resolution, which allows the monopolist to sell this volume of gas in the coming autumn-winter season. And in the near future they will try to coordinate it with other relevant departments.
Currently, there is no gas market in Russia, even though independent producers have the right to sell gas to Russian consumers at free prices. The main volume (about 80%) of supplies is carried out by Gazprom at state-regulated prices. He is also the owner and willful manager of the gas transportation system, which makes other players in the gas business almost completely dependent on the favor of the concern’s management.
Reforming the gas industry has long been on the government’s agenda, but until now, for political reasons, the issue has remained virtually silent. It looks like that will change this fall. The head of the Ministry of Industry and Energy, Viktor Khristenko, recently formed a working group that should develop a concept for the development of the gas market in Russia. And Finance Minister Alexei Kudrin yesterday directly linked the prospects for doubling GDP with structural reforms, including in the gas sector.
Quite unexpectedly, the first agency to prepare a set of proposals for the development of the gas market was the Federal Antimonopoly Service. According to the draft government resolution (its text is available to the editors), market competitive relations are proposed to be developed in three stages. “The first stage involves the creation of an adequate regulatory legal framework for the development of the gas market and the creation of market infrastructure and will continue throughout 2005 and the first half of 2006,” writes the FAS. In such a short time, Mr. Artemyev’s department wants to have time to amend the current law “On Gas Supply” and a dozen regulations, to adopt new documents “following from the essence of the main directions of development of the gas market” (as an example, the law “On Pipeline Transport” is given, which has been in the relevant State Duma committee for several years with virtually no progress). In addition, during this time it is planned to create and regulate a platform for gas trading, a methodology for determining a unified transport tariff and ensure non-discriminatory access to the transport system for all market participants. And only after that we can talk about an experiment on the free sale of up to 5 billion cubic meters of Gazprom gas.
From January 1, 2007, the FAS proposes to gradually begin to reduce gas supplies (by 15% annually from the 2006 target) to all industrial consumers at state prices (i.e., approximately the same as what happens in the process of reforming the electric power industry, where wholesale consumers are allowed up to 30 % of volumes purchased on the free market). “Protected consumers” are the population and a number of organizations (the exact list must be determined by the government) that are financed from the budget - for them supplies will be made at regulated prices.
At the second stage, FAS expects not only to gradually increase the free gas market, but also to improve its functioning in every possible way. Introduce spot sales to balance consumption, expand the practice of long-term contracts, and allow independent producers to enter the foreign market through Gazexport in proportion to the volume of their supplies to the domestic market to “protected consumers.”
According to the antimonopoly service, all this should take four to five years. Although it is easy to calculate that it will be possible to completely transfer industrialists to free pricing only by 2013. And the head of Gazprom, Alexey Miller, as is known, in the spring seriously proposed one-time liberalization for enterprises as early as January 1, 2006, and is unlikely to agree to such a serious delay.
The third stage in the FAS document is described very vaguely and without specific deadlines. However, the timing of the first two stages looks very doubtful in Russian conditions, taking into account the experience of electric power industry reform.
A representative of Gazprom says that the monopoly is extremely skeptical about the FAS initiative. “On Wednesday we sent our comments on the merits to the antimonopoly service; the document is very crude and requires enormous improvement,” he said. - And we are categorically not satisfied with the FAS’s position on the sale of 5 billion cubic meters of our gas at free prices. All parties agreed to carry out the experiment as quickly as possible, but they want to postpone it indefinitely.”
Another source in the concern believes that the FAS is not doing its job. “The Ministry of Industry and Energy should prepare the development concept, taking into account the opinions of all interested parties,” he said. “That’s why the working group was created.” The Ministry of Industry and Energy refrained from commenting. Alexey GRIVACHS |
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