Egypt

consumption side, natural gas prices are set by government decree. Prices for retail consumers have been revised three times since the end of 2016 (Figure 4.12), in conjunction with the reform programme linked to the USD 12 billion International Monetary Fund (IMF) three-year Extended Fund Facility (EFF) and the Central Bank of Egypt’s decision to float the Egyptian pound against the US dollar in November 2016.

The latest price revision, enacted in September 2018, led to increases for retail consumers of up to 75%. Prices for industrial consumers increased by an average of 50% in November 2016 (Adel, 2016). Similar price revisions were conducted for petroleum products, electricity and other regulated products and services in the framework of the EFF reform programme. The IMF reported in February 2019, as part of its fourth EFF review, a decrease in the share of energy subsidies from 4.1% of gross domestic product in fiscal year (FY) 2016/17 to 2.1% for FY2018/19, and a projected 1.2% for FY 2019/20 (IMF, 2019). The Minister of Finance announced in late 2018 that Egypt would not seek further IMF funding at the end of the EFF. At the time of writing, there is no guideline on future natural gas price evolution or deregulation, in a context where Egypt regained self-sufficiency as a natural gas producer and is planning to progressively restart its LNG exports.

Russia

The objective of achieving a Russian domestic price transition to international benchmarks was first formulated in 2006 when the government announced its objective to converge with European netback prices.8 The successive price increases, coupled with the opportunity for alternative suppliers to enter the domestic market, led to a diminution of Gazprom’s market share.

Gazprom retains its role of pipeline system operator and is required to provide nondiscriminatory access to alternative suppliers – in 2017 it provided transmission services to 24 alternative suppliers for a volume of 138 bcm, out of a total of 354 bcm distributed domestically (representing a 40% market share for alternative suppliers excluding off-grid consumption) (Gazprom, 2019). Gazprom’s main competitors on the domestic market are oil and gas producing companies such as Novatek, Rosneft and Lukoil. In respect of the crossborder natural gas trade, Gazprom retains its monopoly on pipeline exports, while the legal framework was amended in 2013 by Presidential Order to allow for alternative suppliers to export LNG (Reuters, 2013), which enabled Novatek to develop its Yamal LNG export facility.

The Federal Antimonopoly Service (FAS) reportedly drafted a government resolution in mid2018 that supports a framework to ensure a transition to market-based prices for the wholesale natural gas market to be effective by mid-2019 (Analytical Center for the Government of the Russian Federation, 2018).

Retail prices for residential consumers have been re-evaluated several times over the recent past (Figure 4.13), growing by 22% between early 2015 and mid-2018 from RUB 5 070 (Russian rubles) to RUB 6 180 per thousand cubic metres. However, the ruble’s depreciation since the beginning of 2018 has offset part of the increase when converting domestic prices into US dollars, thus widening the gap with international market prices.