The Federal Tariffs Service of the Russian Federation made the decision to increase transportation charges for the transit of natural gas through pipelines by independent producers. The increase of 12.3 percent became effective at the start of 2010. The cost for transporting gas domestically is now RUR 41 for 1 000 cubic meters. Export transportation charges are RUR 45.4 per 1 000 cubic meters. 

In 2009, the gas transportation charge increased 4 times – by 4.8 percent at the start of January, by 6.8 percent at the start of April, by 6.8 percent at the start of July, and by 5.9 percent at the start of October. 

Bulk gas prices in general also went up by 15 percent. Last year, wholesale prices increase by 5 percent in January, 7 percent in April, 7 percent in July, and 6.2 percent in October. The price was indexed by 25 percent in 2008. 

In 2010, price indexing for gas sold to consumers will happen in two stages. After the 5-percent increase that took effect on January 1, the price of gas will rise by 15 percent in April 2010. The calculation of gas prices for commercial users and private customers is performed in accordance with the government’s economic forecast.  

The Federal Tariffs Service set the prices of gas delivered by Gazprom at contract levels. Contract prices will not be affected by the decisions of the Federal Tariffs Service. The price cap set by the Service for purchases from Gazprom will be 20 percent of the fixed price for deliveries prior to July 1 and 10 percent for deliveries after July 1 until the end of the year.

According to a 2007 government resolution, Gazprom has the right to sell gas to consumers at freely-negotiated prices. The mechanism contemplates setting a regulated price ceiling (minimum and maximum price levels) for different consumer categories. Fixed gas prices set by FST of Russia are identified as the minimum price levels. The maximum price levels are set on the basis of regulated fixed prices increased by 60 percent in 2007, by 50 percent in 2008, by 40 percent from January 1, 2009, by 30 percent from July 1, 2009, by 20 percent from January 1, 2010, and by 10 percent from July 1, 2010.

Russia’s largest independent producers of natural gas are Lukoil, NOVATEK, Surgutneftegas, and TNK-BP. Independent producers, together with Rosneft, accounted for 13.9 percent of gas transported in Russia during the first three quarters of 2009.