Russia clears 20 pct domestic gas price rise in '09

MOSCOW, Nov 6 (Reuters) - Russia's tariff agency has cleared an almost 20 percent rise in domestic gas prices next year as another step to bring the currently state-capped prices up to market levels in a few years, the agency said on Thursday.

Wholesale gas prices for industrial consumers will rise by 19.6 percent in 2009, Denis Volkov, the head of the agency's oil and gas department, told Reuters.

The tariffs for independent gas producers to pump the fuel along the pipeline system owned by gas export monopoly Gazprom (GAZP.MM) will increase by 19.5 percent, he added.

The increase will be implemented in two stages -- from Jan. 1 the prices will rise by 13 percent and the tariffs by 12.5 percent. They will fully increase from July 1, Volkov said.

The government in May approved the initial plan to raise prices for gas, power and railway services, which the Economy Ministry has said would push inflation up by 0.5-1.4 percent per year between 2009 and 2011.

The government is planning to gradually increase local gas prices until 2011 to achieve a declared level of equal profitability of sales on both local and export markets.

Russian gas prices currently stand at 1,422 roubles ($52.84) per 1,000 cubic metres, while Gazprom, which supplies a quarter of Europe's gas, has said its export price for Europe will hit $500 in the fourth quarter of this year. (Reporting by Vladimir Soldatkin, writing by Tanya Mosolova, editing by Anthony Barker)