MOSCOW, June 30 (RIA Novosti) - Gazprom [RTS: GAZP] wants to make domestic supplies of natural gas as profitable as supplies to Europe, the Russian energy giant's head said Friday.
A company official said Thursday the gas giant could lose 30 billion rubles ($1.1 bln) in 2006 and 14 billion rubles ($517.4 mln) in 2007 on domestic gas supplies, following losses of 8 billion rubles (almost $300 million) in 2005.
Speaking at an annual shareholders meeting Friday, Alexei Miller said: "Natural gas prices on the domestic market must make consumers increase the efficiency of its use, and facilitate the development of competition between alternative fuels and the establishment of optimal price ratios for natural gas, coal and fuel oil."
Miller said favorable conditions had developed to solve long-standing problems on the domestic market. "Gazprom is continuing work on solutions to liberalize the market for commercial consumers. Turning to stock-market technologies and long-term contracts for supplies to such consumers will help rectify the current price disproportions between natural gas and alternative fuels," he said.
Miller said the current regulated wholesale prices were fixed below an economically justified level and without consideration for market-based alternative fuel prices or the environmental and technological advantages of gas.
"A pricing system like this accounts for the disproportion of fuel prices, irrational structure of the fuel and energy balance and inefficiency of Gazprom's operations on the Russian market," Miller said.
