Gas payments by Russian consumers growing for third consecutive year

The Board of Directors examined the information on improving the payment discipline with regard to domestic gas supplies, as well as on the measures being taken to settle the outstanding consumer debt for the gas supplied by the Company, including the interaction with government authorities to perfect the current legislation that regulates the procedure of paying for gas.

It was highlighted that Gazprom is fulfilling all of its obligations on providing reliable gas supplies to its consumers. In 2018, the Company’s domestic supplies from its gas transmission system increased by 5.5 per cent compared to 2017.

At the same time, the total debt of domestic gas consumers grew by RUB 11.2 billion (+ 6.6 per cent) in 2018 – from RUB 169.7 billion to RUB 180.9 billion (excluding the assignment of rights (claims) in respect of debts of Gazprom Mezhregiongaz Pyatigorsk made in 2017, the debt recovery procedure is underway). As in previous years, heat suppliers are among the most persistent non-payers. They account for 33 per cent of the total outstanding debts.

Gazprom continues its comprehensive efforts on improving payment discipline among Russian consumers, acting, inter alia, through a special-purpose Commission of the Board of Directors.

Largely due to these efforts, the amount of payments for gas by Russian consumers grew in 2018, which was the third consecutive year for this upward trend. The gas payment level moved up to 97.8 per cent in 2018 from 97.2 per cent in 2016 and 97.3 per cent in 2017. Another important sign of improved payment discipline is that more regions are contributing to the debt reduction – their number reached 30 in 2018 against only 26 in 2017.

Legal claims are still the most effective means of addressing the debt for gas supplies. To this end, Gazprom cooperates with regional authorities and law enforcement bodies. As a result, RUB 166.4 billion was recovered in 2018.

The Company is involved in developing proposals to improve the legal framework in the area of debt settlement. In 2018, federal laws allowing the conclusion of direct contracts between consumers and energy supply companies and also providing for more severe punishments for unauthorized connection to gas pipelines were put into effect. The drafts of these laws had been formulated with due regard for Gazprom’s proposals.

The Company’s Management Committee was tasked to continue working on recovering debts for the gas supplied by the Company, improving gas consumption discipline and cooperating with government authorities in order to update the current Russian legislation governing gas payments.