The Russian government is questioning the need for reform in the country’s gas sector, putting previous plans for modernisation of the industry on hold. Disputes have arisen between the Economy Ministry, which favours reform, and the massive Gazprom, the state-owned utility which produces about 90% of Russia’s gas supplies.
Gas prices in Russia are set by the government, and are much lower than in other countries. European Union officials have said that reform of the gas utility is necessary before Russia can join the World Trade Organisation, as they believe Gazprom is subsidising Russian industry with cheap energy.
The Economy Ministry had planned to separate Gazprom’s transportation and production businesses; Gazprom is resisting the suggestion, saying it will be the start of a break-up of the company.