Political gas‐pricing premiums: the development in West Germany 1977–1985

Abstract

Ole Gunnar Austvik MANY PEOPLE have claimed that the danger of a disruption in the supplies of natural gas from the Soviet Union to Western Europe must lead to increased Norwegian production to supplant Soviet exports. This is an argument which has been put forward as particularly applicable in a situation where the “normal” tempo of development of Norwegian gasfields, and a decrease in Dutch production, would lead to a disturbingly large share of imports having to come from the Soviet Union. It is claimed, especially from the Norwegian side, that, in order to increase our production faster than the so-called “normal” plan, Norwegian gas would have to be priced higher than Russian gas. In order to see if any such preferential pricing has in fact been implemented, I shall in this paper compare the prices of supplies of natural gas from various countries to West Germany, and discuss various opinions regarding the possibility of any type of preferentials involving the participants in the market. Companies and government authorities are extremely reticent about allowing gas prices to be revealed to the general public, and prices in both previous and future contracts are only referred to in more or less general terms in a number of specialist magazines. In official trade statistics, too, prices are kept secret in many countries by means of the suppression of figures related to quantity or value, distribution by country or combinations of these. This secrecy hampers discussions about the reality of preferential gas pricing. A great deal of data suppressed in statistics may, however, be decoded by comparing different information. As far as gas prices are concerned, we have arrived at quantities, values and thus prices of the gas West Germany has registered as imported from each individual country, by utilizing statistics published by the Statistisches Bundesamt under different nomenclatures. The advantage of using such a source is that each import figure is based on invoice values, converted to a price cif the West German border. This makes prices comparable, even if the contracts contain different processing values.