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. Last Updated: 07/27/2016

Consumers to Pay 15% More For the Price of Wholesale Gas




Russian residents will have to pay 15 percent more for wholesale gas prices as of Wednesday, the newspaper Kommersant Daily reported.


However, prices for gas used by power stations will go down 17 percent, the paper said.


Analysts said the Federal Energy Commission measure was another attempt to gradually level out industrial and residential rates for gas. Industries currently have to pay one third more than residential users.


Officials have said in the past that rates would be equalized by Jan. 1, 1999.


Residential retail rates, which are set by regional administrations, vary across Russia from 6.5 kopeks to 48 kopeks (about 2 cents to 10 cents) per cubic meter, with the monthly consumption averaging 8 cubic meters per person, the report said.


The measure is not likely to significantly affect residential users. The commission had earlier recommended that retail increases should not exceed the wholesale rates by more than 20 percent.


Thus the current wholesale increase was not likely to raise monthly residential rates by more than 80 kopeks per person, the report said.


In Moscow, for example, authorities were considering raising residential rates to 2 rubles from the current 1.6 rubles, an official at city gas provider Mosgaz said.


But one analyst said the lower wholesale rates for power plants may help those stations whose utilization rate is around 25 percent -- half the national average.


By being able to buy more fuel -- thanks to cheaper rates -- these stations could increase their utilization rate and bring down their tariffs. This could have an overall downward effect on the tariffs across the energy sector in general, the analyst said.


Russian citizens have for long paid far lower gas rates than the industrial consumers, and the latest changes are part of the government's policy to correct that imbalance.