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 hoping low gas prices will 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.
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