Russia: Warnings of cheap gas threat to electricity

Russia could face a breakdown in its electricity sector unless domestic gas prices are raised, according to a senior bureaucrat.

Anatoli Chubais, chief executive of the state-owned electricity monopoly UES, said: “We are facing a worsening gas deficit. The reason for the domestic shortage is clear — gas is too cheap domestically. The Government should raise the price to reduce domestic demand.”
Russia’s domestic gas market is probably the cheapest and least efficient in the world. Gas costs $45 per 1,000 cubic metres, a quarter of the international market price. Mr Chubais said: “With such a low price, we are always going to face domestic shortages.”

The Times