Facing losses, huge debts, and layoffs, Gazprom is now turning to Russian citizens to help it out of its financial woes, writes “Rzeczpospolita.”
Gazprom’s management is reportedly demanding that the Kremlin raise gas prices threefold on the domestic market.
Alexey Sakharov, head of Gazprom’s strategic department, spoke about the company’s difficult situation: “The current level of regulated wholesale gas prices in Russia does not ensure the creation of financial resources in sufficient quantities to make the necessary capital investments in the maintenance and development of gas infrastructure in the interests of Russian customers. And this cannot but affect the reliability of gas supplies in the long term,” he warned during a meeting of the Council of Experts in the State Duma.
Sakharov argued that the price of gas for Russians must rise to a level that will allow Gazprom to provide gas to all regions and implement investment projects. The company will also have to triple the tariffs for gas transmission for independent producers.
In May 2024, Remix reported that Gazprom had reported its first loss in 20 years and was running a $7 billion deficit. Earlier in January, the oil giant announced that it would have to lay off more than 1,500 employees from its headquarters in St. Petersburg.
“Gazprom is currently generating losses. The rate frozen since 2015 is 62.5 rubles per thousand cubic meters per 100 km, and the company’s expenses amount to 109 rubles. The price that Gazprom needs and demands from the Kremlin is 170 rubles,” the portal quotes Sakharov as saying.
Gas in Russia used to be cheap, but everything changed after the invasion of Ukraine. “Since the beginning of the war, the Russian government has carried out a record indexation of gas tariffs for citizens in over 10 years. Last year, gas prices increased by 11.2 percent, in 2022 — by 3 percent in the summer and 8.5 percent in December. A new increase of 10.2 percent is planned from July 1, 2025, (the cumulative increase in gas prices will be 37 percent since the beginning of the invasion of Ukraine),” they state.
Back in December, Putin admitted that Russia’s economic growth measured in GDP in 2025 will be half of what it was in 2024, growing less than 4 percent this year, and, according to the Kremlin’s official estimates, it will slow down to 2-2.5 percent in 2026.
The Russian president said the task for the authorities next year will be to “stabilize inflation,” which is soaring despite the efforts of the Russian central bank, which raised the interest rate to the highest level in 20 years.
