Grazprom Planning To Raise Gas Prices In July.

Gazprom has announced that it plans to raise gas prices for Ukraine starting from July. Gazprom’s Deputy Chairman Alexander Ryazanov, said the price for industrial consumers would be raised from USD 110 to USD 130 per ths cm of gas (excluding VAT and transport costs). Concorde Capital: Looking past the fact that legally Gazprom has no right to set local prices, a second gas price hike in mid-2006 would not surprise anybody in Ukraine. In our report from March 7, we assumed the yearly average price for industrial consumers would be about USD 127 per ths cm including transportation costs. Currently industry pays about USD 118 per ths cm (net of VAT). If the price goes up to USD 140/ths cm (including transport costs), the businesses will end up with an annual average gas price of approximately USD 129, which is inline with our forecast. However, we believe the negotiations are going to be tough and will be watching the process carefully.