Ministry of Economy predicts reduction of Gazprom’s proceeds by a quarter

The price for Gazprom’s gas in Europe will fall by more than a quarter in the next two to three years - this scenario was taken into account by the Ministry of the Economy during the preparation of the budget. This effect will be caused by the revision of contracts with European customers, especially the transfer to indexing of a part of the volume at spot prices. If the Ministry of the Economy’s forecast is justified, Gazprom may lose $4 billion of export revenues already this year. Analysts agree the possibility of the reduction of the Gazprom’s prices on sales to the non-CIS countries in the coming years, but they think that it will not be so sharp.

The Ministry of the Economy expects an even more sharp fall of prices of Russian gas duing export to the non-CIS countries than it was expected in May. According to the macroeconomic forecast of the Ministry through until 2017, the average price of this gas will decrease to $349 per thousand cubic meters already in 2014 and then will fall to $316, $307 and $302 in 2015-2017 respectively. Thus, over the next three years, the average sale price to the non-CIS countries could be reduced by 28% as compared with $387 per 1 thousand cubic meters by results of 2013. According to the Ministry of the Economy, the volume of the supplies will remain almost stable.

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