Labor Cost

Important Changes in Russian Gas Business Environment

Cost of Labor and Materials in Russia (2-Mar-2005)

Gas Price in Russia (6-May-2005)

Cost of Labor and Materials in Russia

Cost of Russian labor continues to grow at a very high rate.
- The average Gazprom wage in January-November 2004 is 47% higher than in the same period of 2003 (in US dollars).

_{Source:
Roskomstat - RF Department of Statistics}

_{Source: Roskomstat - RF Department of
Statistics}

_{Source: RF Central Bank}

A small part of this growth is explained by a weaker dollar.
- From November 2002 to February 2005 the US dollar lost 12.6% against the Russian ruble.
The average Gazprom wage is five times higher than the Russian average.
- In 2005, the RF Department of Statistics (Roskomstat) has stopped reporting average wage of Gazprom.
The growth of domestic costs has a direct impact on both operating and investment costs of all Russian businesses. The speed of growth affects the future delivery cost of gas for domestic and export markets.

Gas Price in Russia


_{Source: RF Federal Tariff Service,}	_{Source: RF Federal Tariff Service}

The left chart shows gas price for non-residential consumers in Zone 9 (former Zone 5 - Central European Russia) in rubles and dollars per thousand cubic meters (mcm), net of VAT.
The right chart shows the same price in rubles and euros per MWh, net of VAT.
- Euro price for 1997-1998 is based on the exchange rate of German Mark (DEM).

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