Gazprom Says Gas Price for Europe Already in Excess of US $ 500

Ashgabat, 1 October 2008 (nCa) --- A press release of Gazprom says that Alexi Miller, chairman of Gazprom, told journalists, “. . . the dynamics of [gas] price increase has surpassed the expectations of Gazprom: the price of gas supplied by Gazprom to Europe is already in excess of US $ 500 per thousand cubic meters in October [2008].”

“This summer, in July, during the visit to Azerbaijan, we announced that we have projected the ‘European price’ of Russian gas to reach US $ 500 per thousand cubic meters by the end of 2008,” said Miller.

Since Gazprom has not mentioned that the increase in gas price could be attributable to increase in extraction costs, only two reasons are left for early rise in price: 1. Tough negotiations with Central Asian producers; and 2. South Ossetia.

It is either or both.