Economy Minister Artsvik Minasian has played down a 9 percent reduction in the price of Russian natural gas delivered to Armenia, saying that it will not give a significant boost to the Armenian economy.
The price cut was formalized on April 7 during Russian Prime Minister Dmitry Medvedev’s visit to Yerevan. Armenia’s Russian-owned gas distribution network will now pay Russia’s Gazprom giant $150 per thousand cubic meters of gas, down from $165.
“Of course, any price reduction is a positive thing regardless of its scale,” Minasian told reporters late on Tuesday. “But in this case, I, as economy minister, cannot consider the $15 price decrease a substantial contribution to our economy in terms of lowering production costs [of corporate gas consumers.]”
Like Prime Minister Hovik Abrahamian, Minasian could not say whether the retail price of gas supplied to those consumers as well as households will also go down by 9 percent. He referred all inquiries to Armenia’s Public Services Regulatory Commission.
The Armenian government requested a gas price cut early this year, citing the collapse in world oil prices interconnected with gas tariffs. Abrahamian said in February that cheaper gas is “essential” for the competitiveness of Armenian manufacturers using it.
Those of them that are heavily reliant on exports to Russia have been hit hard by a sharp depreciation of the Russian ruble caused by the decreased oil prices.
Abrahamian also stood by his proposal that the prices of gas and other commodities traded within the Russian-led Eurasian Economic Union (EEU) be set in Russian rubles. The Russian currency has lost more than half of its value against the U.S. dollar since July 2014.
Minasian, who was appointed as minister last month, strongly backed the idea of the ruble peg. He said Yerevan should therefore seek to “reconsider” its gas agreements with Moscow and Gazprom.
The Armenian and Russian premiers announced no agreements to that effect after their talks in Yerevan.