Sales
In 2006, Gazprom sold 316 billion cubic metres (11.2 trillion cubic feet) of gas to domestic customers in Russia; 162 billion cubic metres (5.7 trillion cubic feet) to rest of Europe and 101 billion cubic metres (3.6 trillion cubic feet) to CIS countries and the Baltic states. There is a considerable difference in gas prices for these three customer groups. Inside Russia, according to Russian government policy, Gazprom is forced to sell gas at a considerable discount. This is a result of the socialist legacy, according to which energy is a "basic human right." Consequently, Gazprom receives about 60% of its revenues from its sales to European customers.
The cheap domestic price has caused problems for the Russian economy, such as overdependency on gas as an energy source and lack of investment in new production fields. Until 2004, Gazprom could only sell gas inside Russia, with a loss. It has also been realized that development of the new high-cost gas fields will not be possible without prices increasing. In 2006, the Russian government decided that domestic gas prices for industrial customers will rise to European netback levels (with tariffs and transmission costs reduced) by 2011. In 2008, average gas price paid by Russian industrial customers was $71/mcm, while households paid $54/mcm. Both prices are expected to rise about 25% in 2009, 25% in 2010, and 40% in 2011. Gazprom's attempts to bring CIS export prices to European levels have led to several disputes, most seriously with the Ukraine in 2006 and 2009.
| Gazprom sales of gas 2004-2008 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2004 | 2005 | 2006 | 2007 | 2008 | |||||||
| Volume | Price | Volume | Price | Volume | Price | Volume | Price | Volume | Price | ||
| Russia | 306 bcm | $47/mcm | 307 bcm | $36/mcm | 316 bcm | $43/mcm | 307 bcm | $42/mcm | 287 bcm | $67/mcm | |
| CIS+Baltic | 66 bcm | $36.33/mcm | 77 bcm | $50.02/mcm | 101 bcm | $76.37/mcm | 100 bcm | $91.6/mcm | 96.5 bcm | $118/mcm | |
| Europe | 153 bcm | $101.61/mcm | 156 bcm | $140.09/mcm | 162 bcm | $192.59/mcm | 168.5 bcm | $185/mcm | 184.4 bcm | $313/mcm | |
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