Regulated natural gas prices rise by 8% for all consumer categories from July 1, 2024
The planned indexing of gas tariffs is set to continue on July 1, 2025 in line with recommendations from the Federal Antimonopoly Service (FAS). Draft orders from the relevant department were published on the regulatory legal acts portal on Friday, July 7.
Forecasts from the Ministry of Economic Development in September 2022 already projected increases in gas tariffs for July 2024 of about 7%, with a similar rise anticipated in 2025, as reported by interfax.
The most recent gas price adjustment in Russia occurred in December 2022, with an 8.5% increase. Tariffs for consumers using gas for heating stood at 6.42 rubles per cubic meter, while those without heating faced 7.33 rubles, rising to 8.92 rubles under certain conditions.
The new wholesale gas prices are slated to take effect on July 1, 2024. This adjustment is expected to be the first in a year and a half. Revenues from the changes will support social gasification programs in regions and the construction of pipelines to serve consumers.
The ministry said tariff indexation will help ensure a reliable gas supply to end users through investment programs carried out by companies, enabling improved service quality for households and enterprises alike.
A ministry spokesperson noted that tariff indexation will support maintaining a stable gas supply by advancing company investment initiatives. More than 30% of Russian gas pipelines have been in operation for over four decades. The indexation is also aimed at accelerating the social gasification program, which has reached the borders of more than 600 thousand lands, bringing gas to more households.
Gas tariffs in Russia are traditionally categorized by user type and geographic distance. The category depends on whether gas is used by private homes or by industrial facilities where gas is supplied. Price zones are determined by the distance from the producing region; farther consumers face higher rates.
Tariffs are set by regional authorities using a nationwide methodology. They usually change on July 1 each year, with the allowed increase constrained by the growth index approved by the Russian government, according to a representative from Gazprom.
It should be recalled that housing and communal services tariff indexing was planned for July 1, 2023, but had previously been scheduled for December 1, 2022. At the end of the previous year, government decrees indicated a marginal increase of up to 9% across all regions. The next tariff adjustment was anticipated no earlier than July 1, 2024.
In terms of spending patterns, early 2023 surveys indicated rising outlays on housing and communal services, medicines and medical care, food, communications and the internet, and household chemicals, reflecting a broad shift in consumer expenses across the country.