Liberalizing Russian gas markets – an economic analysis

Finn Roar Aune (), Rolf Golombek, Arild Moe (), Knut Einar Rosendahl and Hilde Hallre Le Tissier ()

No 11-2015, Working Paper Series from Norwegian University of Life Sciences, School of Economics and Business

Abstract: The Russian gas market is highly regulated. In this paper we examine possible impacts of regulatory changes on the demand side of this market. In particular, we consider the effects on Russian energy consumers of removing natural gas subsidies, and how changes in Russian gas consumption may affect its gas export to Europe. We also examine the importance of Russian pipeline capacity to Europe, as well as impacts of hypothetical changes in Russian gas export behavior. For this purpose, we use a detailed numerical model for the energy markets in Europe and Russia – LIBEMOD. Our results suggest that removing implicit subsidies to Russian gas consumers will have substantial impacts on total consumption of gas in Russia, especially in the electricity sector. Gas exports to Europe will be significantly affected as more gas becomes available for exports. Removal of other market imperfections in the Russian energy markets has smaller impacts on prices and quantities than removing gas subsidies. More competitive Russian gas export behavior would lead to much higher gas export to Europe, but our results suggest that Russian welfare would drop due to lower gas export prices.

Keywords: Russian gas prices; Russian gas export; European energy market (search for similar items in EconPapers)
JEL-codes: C63 F10 Q41 Q48 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2015-06-01
New Economics Papers: this item is included in nep-cis, nep-ene, nep-reg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Liberalizing Russian Gas Markets - An Economic Analysis (2015)
Journal Article: Liberalizing Russian Gas Markets: An Economic Analysis (2015)
Working Paper: Liberalizing Russian Gas Markets - An Economic Analysis (2015)
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