The average price of gas for Americans is almost three times more than what Russians, according to Gazprom Senior Financial Director Andrey Kruglov.
The company’s annual shareholder meeting, which coincides with
the company’s 40th anniversary, was held at the Moscow
headquarters on Friday.
Russian customers pay 2,429 ($74.25) per 1,000 cubic meters on
the Russian domestic market. This price is 22 percent lower than
corporate customers, according to Kruglov, and is almost one
third of what American customers pay.
According to the Federal Tariff Service, the price of gas,
excluding reducing coefficients, should be 7,900 rubles ($241.5)
for 1,000 cubic meters, so Gazprom is selling for almost a third
of market value.
The company loses big on domestic gas sales, and over the next
five years could lose $60 billion on the subsidized prices,
Mikhail Korchemkin, director of East European Gas Analysis told
Vedomosti Thursday.
Under fire for gas prices in Europe, Deputy CEO Aleksandr
Medvedev wrote it will stand by the Gazprom rate, as it “is in
our interest to keep gas competitive”.
Remaining competitive is difficult without its once, and now
former cheerleader, Vladimir Putin.
In 2007, the Kremlin swung its support to Gazprom to increase
domestic gas prices, but has since faltered on this promise,
instead setting gas prices low to keep consumers active.
Medvedev argues the portrayal of Russian gas prices being too
expensive are unfair and inaccurate, and that the portrayal of
Gazprom as a company on the decline is simply a “fashionable
illusion”, as he wrote in a
letter to the Financial Times on June 24.
The government has severed Gazprom’s legal monopoly on gas
exports, for many experts a signal Rosneft will be Russia’s successor star
energy company.
Gazprom remains Russia’s biggest and highest-valued company, but
has failed to meet goals announced by its head Aleksey Miller
five years ago. In June 2008 when Gazprom was valued at $360
billion, Miller said that in the next seven to eight years it
would become the world's largest company with a market
capitalization of $1 trillion.
Now, the value of Russia’s largest natural gas producer is
below the $100 billion mark, and by most
estimates, will continue the downward trajectory.
The price of oil by the end of this year and the beginning of
next year is likely to fall below $100 a barrel, Deputy Economic
Development Minister Andrey Klepach told journalists in Moscow on
Friday.