On January 15, 2008, the Joint Stock Company “Latvijas Gāze” signed an agreement on natural gas supply prices between the JSC “Latvijas Gāze” and the OJSC “Gazprom” for the period from 2008 thru December 31, 2010. The new agreement envisages increase of the natural gas purchase price due to two reasons: the policy of the Russian supplier to align natural gas supply prices in the European market and the high prices of oil, oil products and other energy resources in the world, significantly contributing to the increase. It is not yet possible to say what changes will me made to the tariffs for customers in Latvia because it is difficult to predict the prices of oil products. Besides, in 2008 the Public Utility Commission will develop a new method of tariff calculation, which will serve as the basis for the JSC “Latvijas Gāze” to draw up a tariff project for submission to the PUC. However, if the prices of oil and oil products keep high, the required tariff increase might reach 50% on average. It should be taken into account that already now the purchase price makes about 80% of the tariff for 1 cubic metre of natural gas. In December 2007, the Council of the JSC “Latvijas Gāze” reviewed the company's budget for the year 2008 where losses of 5 to 30 million lats were envisaged if there are high oil product prices and the tariffs for customers in Latvia are not duly increased, whereas, if the tariffs are raised in time, the JSC “Latvijas Gāze” might operate with 300 million LVL turnover. The JSC “Latvijas Gāze” considers such turnover sufficient for profiting about 30 million lats. The prediction for non-audited turnover of the year 2007 is 230 million LVL. According to non-audited information, the profit has increased in comparison to the previous year. The issue of payment of dividends for the year 2007 will be reviewed by the Council of the JSC “Latvijas Gāze” after approval of an audited report. Commercial Proxy of the JSC “Latvijas Gāze” Vinsents Makaris