The government is thinking of raising gas prices: revenues from Europe no longer cover the cost

The government is discussing a 10% increase in gas prices twice a year for all consumers except the population. Revenues from gas exports to Europe no longer cover the undervalued cost, experts say.

"Just yesterday, information arrived from the shoulder of the Ministry of Energy: an increase in gas prices to the FAS price by a factor of 1.1, i.e. by 10%, in the first and fourth quarters of each year is being discussed," Director of the Council of Energy Producers Dmitry Bologzhanin said at a meeting of the RSPP commission on Energy, Interfax reports.

Agency sources confirmed that the idea is being discussed, and we are talking about a possible price increase for all categories except the population.

Alexey Grivach, Deputy Director of the National Energy Security Fund (NWF), notes that the proposed increase is above the official inflation rate, but roughly corresponds to the real price increase.

"This is due to the loss of revenues from exports to Europe, which made it possible to maintain low gas prices on the domestic market. In addition, the rise in prices is also reflected in deductions to the budget for mineral extraction tax and VAT," says the deputy director of the FNEB.

For consumers, of course, this is unpleasant, Alexey Grivach notes, especially considering that everyone is used to the fact that gas prices are rising much slower than inflation.

"This is probably a compromise between a tough cut in social and investment spending and a sharp increase in gas prices to an economically reasonable level," the deputy director of the FNEB believes.

Average gas price for industrial consumers in Russia averages 6.5 thousand rubles per thousand cubic meters — about $ 83. In the United States, according to the information office of the Ministry of Energy of the country (EIA), enterprises bought fuel in February of this year at an average of $ 204, and in 2024 the minimum average monthly price was $110 in August. The cost depends on gas quotations on the Henry Hub exchange.

As reported by EADaily, since 2021, Gazprom has reduced exports to Europe five times due to sanctions and counter-sanctions. After the stop of Ukrainian transit from January 1, 2025, supplies will decrease further. The company is counting on a turn to the East. Exports of the "Power of Siberia" to China are growing. In a few years, the "Far Eastern route" to China will be launched. But this is not enough to compensate for the losses in exports to Europe, which has always been a premium market for the Russian company.