Gazprom: Substantial Decline In European Gas Consumption

Gazprom: Substantial Decline In European Gas Consumption
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Δευ, 30 Μαΐου 2011 - 18:03
Russian state gas firm OAO Gazprom (GAZP. RS) is witnessing a substantial decline in European gas consumption this year, the Interfax news agency reports Monday citing the company's Deputy Chief Executive Valery Golubev.
Russian state gas firm OAO Gazprom (GAZP. RS) is witnessing a substantial decline in European gas consumption this year, the Interfax news agency reports Monday citing the company's Deputy Chief Executive Valery Golubev.

"We are seeing a substantial decline in gas consumption on the European market," Golubev told lawmakers at parliamentary hearings in the lower house the Duma.

Golubev also voiced opposition to a proposal by the country's finance ministry to increase the mineral extraction tax on gas, as the government fights a looming budget deficit.

However, Gazprom's exports to Europe--it's most lucrative market--increased by 12% in the first quarter and are up 30% in May compared to last year, due to supply disruptions from North Africa and the Middle East, while European utilities have taken advantage of low gas prices at the start of the year to fill up storage facilities.

But that trend is expected to fall later this year, as Gazprom's gas prices under long-term contracts, which follow those of the oil price with a six to nine month lag, will rise.

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