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> Economy

Gazprom is ready to meet the growing demand for gas in EU

As experts say the market price of natural gas in the EU is changing from country to country - Rich countries of Europe pay less money than poorer countries

Newsroom September 22 01:11

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A working meeting between Russian President Vladimir Putin and Gazprom Management Committee Chairman Alexey Miller took place this week and Alexey Miller stressed that Gazprom was ready to meet the growing demand in the European Union.

He clarified that the company would provide gas on a daily basis, which was fully consistent with the contractual obligations of the company.

Executives of the Russian company estimate that the average price of Russian gas for European market will be decreased to $350 per 1,000 cubic meters, as compared to $387 for 2013, but that would not apply to all countries.

It is seems that rich countries of Europe pay less money than poorer countries. As the below map shows, which was published by Reuters, the western countries pay less money to Gazprom comparing to the weaker countries of Central and Eastern Europe.

map

As experts say the market price of natural gas in the EU is changing from country to country, but cannot be sure about the reason since the commercial policy of Gazprom is confidential. Also, the contracts signed between the company and various countries include different terms and conditions.

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Therefore, there is not a standard way to determine a single price for all countries.

However, the energy dependence of each country is probably the main factor that determines the price. If a country has many energy resources, then it is more likely to buy the gas cheaper than countries with no or fewer energy resources.

As Mikhail Korchemkin, head of East European Gas Analysis, says contract prices depend on various factors, but mainly on market competitiveness.

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