Speaking at a meeting of the Supervisory Board of the Russian Gas Society, Vasily Smirnov said that liberalization of gas prices would increase inflation by just 0.6-0.7%.
"In the long term, gas prices will be lower in Russia than in Europe and will give domestic producers an advantage," Smirnov said.
He added that gas prices would only be liberalized for industrial producers. Gazprom proposes continued regulation of gas prices for the most sensitive consumers, including the housing and utilities sector and budget-financed organizations.
Gazprom estimates that gas prices will rise by no more than 20% after liberalization, which will equate to about $2.3 billion or 0.64% of the company's retail trade turnover.
Smirnov said that the company had to achieve "normal price ratios for energy products, for example, between coal and gas." He added, "We need to start in 2006 if we are to achieve the optimal ratio by 2010."
The Gazprom official said that all the necessary legislation for price liberalization had been produced, and that all that was needed was a government resolution.
Smirnov also said that ahead of price liberalization the company should sell 5-10 billion cubic meters of gas through an exchange so it could determine price parameters.
