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The export of Russian gas to Europe: breaking up the monopoly of Gazprom

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Having exports from more than one Russian gas producer has been an important issue in the Russian-EU energy dialogue during the last decade. Nevertheless, in June 2006, Russian Federal law legalized the de facto export monopoly of Gazprom. Political and commercial interests have regularly explained the Russian strategy for the European gas market. However, it is important that economic efficiency is also taken into account. Economists often evaluate the efficiency of a policy through its effect on national welfare. In this paper, I examine both theoretically and numerically whether a liberalization of Russian gas exports would increase Russian national welfare, given that the Russian domestic market is already deregulated. The results of the paper show that the dominant position of Gazprom in the Russian gas industry might stimulate the government to support Gazprom's export monopoly. The market share of independent producers in the Russian gas market would have to be significantly increased for Russian export liberalization to be welfare enhancing.

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  • Marina Tsygankova, 2007. "The export of Russian gas to Europe: breaking up the monopoly of Gazprom," Discussion Papers 494, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:494
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    Cited by:

    1. Marina Tsygankova, 2007. "When is Mighty Gazprom Good for Russia?," Discussion Papers 526, Statistics Norway, Research Department.

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    More about this item

    Keywords

    Russia; Natural gas; export; monopoly; national welfare;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D60 - Microeconomics - - Welfare Economics - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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