Ekaterina Galeeva, Researcher, Industrial Organization and Infrastructure Economics Department at the Gaidar Institute, commented for Nezavisimaya Gazeta on the lowest-ever prices for gas in the US, having underlined the difference in approaching the pricing in both countries.
"The US has competitive market pricing, while in Russia pricing is state-regulated. In the US, gas is a commodity that is available for purchasing and selling on the exchange. The price is determined solely by supply and demand. There are many independent producers and traders in the US, which contributes to intense competition," the expert noted.
Ekaterina Galeeva emphasized that in Russia the wholesale gas price for the domestic market is set by the state and has a social and economic focus. "Pricing in the Russian Federation pursues goals other than simply balancing supply and demand. These goals include budget revenues, cross-subsidization (low prices for some consumer groups are offset by higher prices for others), and industrial stimulation (the state uses gas prices as an economic policy tool, supporting certain industries or regions),” the expert explained.