MOSCOW, May 19 (RIA Novosti) - Liberalization of Russia's domestic natural gas market will be impossible in the next few years, the head of the Russian Gas Association said Friday.
Europe has long demanded that the country liberalize its domestic market, but the authorities have resisted the move over fears of major price rises.
Valery Yazev, whose association promotes itself as the most effective mechanism for coordinating interests in domestic and foreign gas policy, said the main problems with the domestic natural gas market's liberalization were insolvent household demand for gas, a need to overhaul existing technology and increase transportation capacities.
He said consumer gas market and the housing and utilities sector would continue to be regulated for a long time to come.
"If we remove control over gas prices, they will soar to $70 (per 1,000 cu m)," he added after saying that current price stood at $40-45.
Yazev said liberalization would be possible only simultaneously with the domestic electricity market, which currently sells 5-10% of its product at free-market prices.
The high level of gas consumption, he said, was down to outdated equipment and losses of Russian gas monopoly Gazprom had been predicted at 9 billion rubles ($332.5 million) in 2007, which had forced the monopoly to ask the government for a 22% gas price rise.
But Yazev said the 2007 parliamentary elections made it unlikely that the increase would happen. "It seems that they [Gazprom] will not get what they want," he said.
