JSPES, Vol. 44, No. 3-4 (Fall-Winter 2019)
pp. 339-365

Wielding The “Energy Weapon”: The Dilemma of Russian Gas Liberalization and Dual Pricing Policy  

Galina Bogatova
Florida International University, Miami

After a decade of dramatic decentralization and privatization of Russia’s gas and oil industry, the pendulum is moving back toward state control.2 The government currently owns around 52 percent of the only Russian gas export company Gazprom.3 Moreover, any plans for gas industry liberalization were clearly cancelled after Vladimir Putin stated his position during a summit with German Chancellor Gerhard Schröder in October 2003. Putin presented Russia’s new approach by saying: “We are not going to divide Gazprom. In the case of gas, it has to deal with the state (i.e. the Russian Federation). The gas pipeline network is the creation of the Soviet Union, and it is only the Russian Federation which can keep it in functioning order, even if we speak about its parts located outside Russian territory.”4 Thus, despite liberalization being a logical next step after privatization, Russia maintains state-centric tendencies of gas price control.