ABSTRACT
According to the current legislation, after 1st July 2019 Russia should refuse to regulate wholesale gas prices and move to regulation of only transportation tariffs. The reform, which is positioned by the Federal Antimonopoly Service (FAS) as the first stage of deregulation of the domestic gas market, should, therefore, lead to a decrease in gas prices across the country by an average of 5-10% according to FAS estimations. In addition, since 2014, gas again began to be sold at Saint Petersburg Stock Exchange. Consequently, the exchange price for gas is suggested to become a new price indicator instead of high and low price borders. In this paper the gas market in Russia is explores and, in particular, the exchange gas market which started operating again in 2014 after it was closed in 2008. In connection with its appearance, experts disagree about whether it will be able to become a price indicator in place of the existing regime for regulating the lower and upper border of prices. OJC Gazprom, the Russian gas monopolist, insists that the exchange price may becomes an indicator and price limits can be abolished. In this paper, the volatility of the gas market has been studied since the beginning of 2017 using the VaR (Vector Auto Regression). The basic hypothesis accepted is that stock price can be assumed as new indicator. The main result achieved is that all tests strengthen our hypothesis, that existing volatility and particularly with season trends looks suspicious with no evidence why that happens.
