The Gazprom Board of Directors addressed the information about the Company’s efforts aimed at improving financial discipline with regard to domestic gas supplies and the measures taken to settle the outstanding consumer debt.
It was highlighted that in 2017, as in previous years, Gazprom had fulfilled all of its obligations for providing reliable gas supplies to all consumer categories in Russia, including socially vulnerable groups.
The continued accumulation of overdue debt for gas supplies remains a problem for the Russian gas market. According to provisional data, the total outstanding debt amounted to RUB 170.4 billion by January 1, 2018, an increase of RUB 9.5 billion from early 2017. Among the most persistent non-payers are heating suppliers, which account for about 35 per cent of the total debt and two-thirds of debt growth.
However, the Company managed to reduce the growth rate of the domestic consumer debt for the second consecutive year: the growth went down from 18.3 per cent in 2015 to 7.1 per cent in 2016 and further down to 5.9 per cent in 2017. There is also an upward trend in payments for the ongoing supplies: over the past three years, gas payments by end consumers rose from 96.3 per cent to 97.4 per cent.
The consistent improvements concerning overdue payments can largely be attributed to Gazprom’s ongoing comprehensive efforts, including through the Commission on Strengthening Financial Discipline set up by the Board of Directors in 2017.
Legal claims and close cooperation with law enforcement bodies are especially effective, with RUB 132.5 billion collected in 2017. The Company continues to work with regional authorities, including under debt repayment schedules.
Gazprom also interacts with the relevant ministries and agencies to update the national legislation governing the procedure of payment for gas deliveries. Specifically, the Company contributed to the development of draft federal laws strengthening accountability for offences in the field of energy supplies and accounting, as well as for unauthorized connections to gas networks.
The Company’s Management Committee was tasked to work further to ensure the ongoing gas supplies were fully paid for by Russian consumers and to reduce outstanding debt, as well as to report the results of those efforts to the Board of Directors in the first quarter of 2019.