Board of Directors examined gas production and transportation subsidiaries pricing policy

Gazprom’s Headquarters host a Board of Directors’ meeting.

The Board of Directors took into account information on the corporate gas pricing policy.

Gazprom’s Management Committee was commissioned to elaborate, jointly with relevant federal bodies, measures on improving corporate gas pricing (tariffs) fundamentals and on managing gas production and transportation subsidiaries’ expenditures.


Gazprom builds up its relationship with subsidiaries based on gas sales contracts and gas transportation services, with corporate prices and tariffs applied.

In determining gas tariffs and prices, the Company takes into account its subsidiaries’ expenditures on gas production, transportation and storage (mining-geological and economic-geographical conditions, subsidiaries operate in, are also taken into consideration); the scope of the works done; major assets status; as well as minimum profits regulated by the Parent Company.

In 2002–2004 the growth of corporate gas prices and tariffs is expected not to be as high as the price boost in the manufacturing sector. Gas transportation and production subsidiaries’ net profits for 2004 are estimated at 1.5% and 2.7%, respectively.

In 2004 Gazprom plans to raise tariffs on gas transportation via gas mains by 7.4%, the industrial deflator index to be at 9%.

The internal gas pricing, not taking into account changes in the subsidiaries’ taxation (gas production tax rate is expected to go up 3.8 fold from RUR 28.3 to RUR 107 per 1 000 cubic meters), is believed to grow 0.6% in 2004.

Gazprom intends to improve its corporate gas pricing by enhancing its subsidiaries’ expenditure control and management system as well as by contracting services through a contest-based system.

Information Directorate, OAO Gazprom

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