In 2004, AO MOSENERGO plans to purchase around 1.2 bn m³ of gas from independent suppliers at market prices.

Under the contract that was signed last April, AO MOSENERGO will buy more than 90% of its gas from Gazprom's subsidiary OOO Mezhregiongas. In accordance with the contract AO MOSENERGO will annually receive around 21.8 bn m³ of gas at prices that are set by the Federal Energy Commission of the Russian Federation. Currently, AO MOSENERGO is preparing to sign a supplementary agreement to specify gas delivery terms for 2004. In 2004, the base fuel price will grow by 20% and reach 912 Rb/m³ (excluding VAT).

AO MOSENERGO has to purchase additional gas (on top of the Gazprom limits) from independent suppliers as it has to generate more power to meet higher consumption needs. By generating more electricity AO MOSENERGO has to increase fuel shipments to its power stations. The higher use of fuel oil and coal by AO MOSENERGO is not efficient from an economic standpoint and has an adverse impact on the environment.

Currently, the gas is the main fuel at most AO MOSENENERGO power stations. The share of gas in AO MOSENERGO's fuel balance amounts to approximately 94%. Coal and fuel oil are used as back-up fuels.