Tariffs charged for transit of natural gas differ widely across the countries of Eurasia that make up the constituency of the Energy Charter. This is a main finding of a study, released by the Energy Charter Secretariat, which analyses tariff-setting methodologies and tariff levels across the main EU and non-EU gas transit countries.
The study reviews tariff arrangements for existing and new gas pipeline systems. It also analyses the overall consistency of gas transit tariffs with the provisions of the Energy Charter, which include in particular the obligations to ensure transparent, cost-based and non-discriminatory transit tariffs.
Tariff levels in different countries vary according to the tariff setting methodology applied, but major differences stem also from technical parameters (pipeline diameter, pressure), geographical conditions, and economic factors such as depreciation of the system and changes in exchange rates.
In general, the analysis showed a significant difference between tariffs charged in EU and non-EU countries, although the increase early in 2006 in transit tariffs in Russia and Ukraine from $1.09/mcm/100km to $1.60/mcm/100km brought these tariffs towards the range shown by the study for comparable cases in the EU. There are also differences in many countries, both within and outside the EU, between tariffs for transit and for domestic transportation. The study does not suggest a generally applicable methodology for setting transit tariffs, but it does include specific recommendations on promoting transparency, cost-reflectiveness and non-discrimination. Improving the degree of transparency with regard to the conditions for energy transit is perhaps the most immediate challenge, and one that applies to a greater or lesser degree across the Energy Charter constituency.
Greater transparency on transit tariffs (and underlying methodologies) and conditions for access to transport facilities would reduce risks perceived by investors, system users and operators, and help to develop a more open and competitive energy market across Eurasia - a core objective of the Energy Charter Treaty.