Oxford - Finding one's way around the maze that are today's stock markets is very difficult, if not impossible, and all the more so when discussing energy and its mechanisms. An Oxford University study attempts to put matters in order and addresses the subject of the "Gas Balance", considered the last piece of the puzzle when understanding the mysteries of prices and the reasons for which some consumers are prepared to buy gas from independent producers at prices higher than controlled ones. Every year Gazprom and the Russian government negotiate the amount of gas to be sold at controlled prices. Once the maximum price is established, potential clients can bid to buy the amounts they need to satisfy demand for the following year. Amounts at controlled prices are therefore assigned to each bidder and any extra amounts of gas requested by certain clients will have to be bought on the open market at a higher price, and not a "controlled" one. This system involving quotas was created so as to comply with Gazprom's limited portfolio, envisaging that a surplus in demand would be absorbed by independent producers. " What has happened," explains the Oxford University analysis, "is that the system was used by Gazprom as a means for reducing amounts sold at controlled prices, and to instead sell the remaining available gas at higher prices." The result has been that, although until five years ago controlled prices involved 75% of the gas sold on the internal market, independent producers and Gazprom itself played leading roles in a constantly increasing number of market price transactions. Faced with a two-tier market, and with pressure applied by the E.U. demanding higher prices on the internal market more in line with world prices, in November 2006 President Putin and the Russian government announced a new price strategy aimed at ensuring that Russian gas prices would be on par with European ones. Decree number 333 dated May 2007 therefore sanctioned neckback parity being achieved by 2011 for exports to Europe. This result was based on the assumption that the price of oil would be US$50-55 a barrel. This decree confirmed Gazprom's right to sell gas to new clients at higher prices as of July 2007, while simultaneously establishing the amounts of gas to be sold at controlled prices fixed at the time and authorized the sale of additional gas with a price progressively falling over the four and a half years between then and the end of 2011. The plan's philosophy envisaged that, with controlled prices rising, rewards for new acquisitions would fall until all prices were equal.