Gazprom-AR2014

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Performance Results
In accordance with the applicable Russian laws, end consumers buy gas at regulated prices
which are differentiated between consumer groups (households vs industrial consumers), as well
as by price ranges, based on the relative distance from the gas production region to the consumer.
Therefore, the regulated wholesale prices for gas supplied to households are 20% to 22%
lower than those for gas supplied to industrial consumers. FTS of Russia revises regulated wholesale
gas prices in accordance with the Forecast of Social and Economic Development of the
Russian Federation prepared by the Ministry of Economic Development of the Russian Federation.
The growth of domestic regulated gas prices is capped by the Forecast of Social and Economic
Development of the Russian Federation prepared by the Ministry of Economic Development
of the Russian Federation and approved by the Russian Federation Government in September
2014.
Weighted average parameters of changes in domestic natural gas prices for 2015 through 2017,
average increase y-o-y, %
2015 2016 2017
Average regulated wholesale prices
for all Russian consumer groups, excluding household consumers 3.5 6.6 4.6
Average regulated wholesale prices
for subsequent resale to household consumers 5.8 6.6 5.0
In order to mitigate the risk of government-imposed gas prices, OAO Gazprom interacts with
federal authorities in order to streamline gas pricing, including the establishment of basic pricing
principles ensuring for OAO Gazprom fixed conditions of domestic gas supplies.
FSU gas markets
Natural gas markets of the FSU countries play a special part in OAO Gazprom’s business, as the
Group is both a supplier and a purchaser of pipeline natural gas there and some of them are gas
transit countries for OAO Gazprom and are the Group’s partners in underground gas storage.
In 2014, Gazprom Group’s gas sales to the FSU countries were 48.1 bcm. Sales revenue (net
of customs duties) was RUB 417.0bn. Gazprom Group’s gas sales to the FSU countries in 2014
and 2013 accounted for 11% and 13%, respectively, of the total natural gas sales and 14% and
15% of the total gas sales revenue for these periods. Gazprom Group covers a significant portion
of natural gas demand in the FSU countries. Ukraine and Belarus are the largest consumers.
Gazprom Group’s natural gas sales to the FSU countries
Sales, bcm
Average selling price
(net of customs duties),
RUB per mcm
Sales revenue
(net of customs duties),
RUB bn
2012 66.1 8,016.4 529.5
2013 59.4 7,132.8 423.5
2014 48.1 8,677.9 417.0
i
Detailed information is presented in
the “Trends and Developments on Oil
and Gas Markets” section
In 2014, natural gas supplies to the FSU countries decreased y-o-y, primarily due to lower
offtake by Ukraine in Q2 2014, resulting from the Ukrainian party’s being switched to a prepayment
method due to payment defaults.
Total gas consumption by the importing FSU countries also decreased due to the general
economic situation and further decline of industrial production, as well as increasing share of coal
and other energy resources in their fuel and energy mixes.
OAO Gazprom Annual Report 2014