Growth in domestic gas debt decreasing for second consecutive year

RELEASE

The Gazprom Management Committee reviewed the information about the Company’s efforts aimed at strengthening financial discipline with regard to domestic gas supplies and the measures taken to address gas debt repayment.

It was noted that in 2017, as in previous years, Gazprom had fulfilled all of its obligations for providing reliable gas supplies to domestic consumers, including socially vulnerable groups.

However, the continued accumulation of overdue debt for gas supplies remains a problem for the Russian gas market. According to current data, the total outstanding debt reached RUB 170.7 billion by January 1, 2018, an increase of RUB 9.8 billion from early 2017. Among the most problematic non-payers are heating suppliers, which account for about 35 per cent of the debt and two-thirds of debt growth.

At the same time, the Company managed to curb the growth of the domestic consumer debt for the second consecutive year, as debt growth went down from 18.3 per cent in 2015 to 7.1 per cent in 2016 and further down to 6.1 per cent in 2017. There is also an upward trend in payments for the ongoing supplies: according to estimates, gas payments by end consumers rose from 96.3 per cent to 97.4 per cent over the past three years.

The positive developments concerning non-payment come as a result of a set of measures implemented by Gazprom, such as the actions conducted at the behest of the Commission on Strengthening Financial Discipline set up by the Board of Directors in 2017.

Such measures as legal claims and close cooperation with law enforcement bodies are especially effective, with the resulting compensations reaching RUB 132.3 billion in 2017. The Company continues to work with regional authorities, including under schedules for gas debt repayment.

Gazprom also cooperates with the relevant ministries and agencies to update the national legislation governing consumer payments for gas. Specifically, the Company contributed to the development of draft federal laws strengthening accountability for offences in the field of energy supplies and accounting, as well as for unauthorized connections to gas networks.

The relevant subdivisions of the Company were instructed to work further to ensure the ongoing gas supplies were fully paid for by Russian consumers and to reduce outstanding debt.

The issue of strengthening financial discipline with regard to domestic gas supplies and measures taken to address gas debt repayment will be brought to the attention of the Gazprom Board of Directors.

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