Filenews 28 June 2022
The Kremlin announced today that Gazprom is likely to seek to change the terms of gas supply contracts to Western countries that will impose a cap on Russian gas prices.
G7 leaders agreed to consider a possible cap on Russian oil and gas prices, with the aim of limiting Moscow's ability to finance its war in Ukraine.
Western officials said they want to encourage sales of Russian oil to levels slightly above production costs to ensure a reduction in Russian profits while maintaining production volumes.
"It depends on the direction, it depends on the decision that Gazprom will make. Most likely, the issue of changing the terms of existing contracts, changing the price will be raised," Kremlin spokesman Dmitry Peskov said in response to a question about the prospect of imposing a cap on gas prices.
Peskov did not specify whether the changes will mean linking the contracts to the proposed caps or a total review of the terms of the contracts.
When asked whether the G7's proposals to impose a cap on Russian oil and gas prices would hit the state budget, Peskov replied: "We do not yet know what it is about ... According to our Constitution, Russia is a social state - fulfilling our social obligations is our main priority."
Despite the increase in its revenues compared to before due to the surge in energy prices caused by the Russian invasion of Ukraine amid the difficulties caused by the imposition of Western sanctions against Moscow, Russia forecasts a budget deficit of 2% of GDP this year, as it strengthens support for businesses and social benefits to offset the sanctions.
Even with this projected budget deficit, Russia needs an oil price of $100/barrel to balance its budget, according to Natalya Orlova, chief economist at Alfa Bank.
Source: Capital.gr
