At the St Petersburg International
Economic Forum, President Vladimir Putin announced a change in
monopoly tariffs' regulations that may seriously affect the future
revenues of Gazprom.
"I want to inform you of a decision we’ve taken: the growth of
regulated tariffs of infrastructure monopolies will be limited, and
should not be higher than the actual inflation rate of the past
year," Putin said.
All investors evaluate Gazprom
assuming guaranteed growth of the domestic price of gas at about 15%
a year. According to the governmental decree, the growth was
supposed to continue until a profit parity of domestic and export
sales of Gazprom was reached. Investors may need to change their
cash-flow models of Gazprom now.
For a partial compensation of future
losses, the Federal Tariff Service suggested
an additional 3% increase of the wholesale price of gas for
Russian consumers on August 1, 2013. A regular 15% raise will take
place on July 1.
Russian gas giant has launched several
very expensive pipeline projects that result in a rapid growth of
gas transportation costs. Combination of a guaranteed growth of
costs and uncertain revenues is likely to disappoint investors.
East European Gas
Malvern, PA, USA
June 23, 2013
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