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Yerevan Disagrees With Russian Criticism


Armenia -- Deputy Prime Minister Mher Grigorian at a news conference in Yerevan, March 30, 2020.

Deputy Prime Minister Mher Grigorian on Thursday insisted that Russian natural gas has never been as cheap for Armenia as was claimed by Russia’s Foreign Minister Sergei Lavrov and that Yerevan is right to seek a reduction in its current price.

“I agree that during some periods the gas price at the border has been below international levels but I cannot share Mr. Lavrov’s view that it was ever two or three times lower than the market-based price,” he said in written comments to RFE/RL’s Armenian service.

Lavrov dismissed on Tuesday complaints that European Union member states are now paying less for Russian gas than Armenia and Belarus because of the collapse in international oil prices. He argued that that unlike EU consumers, the two ex-Soviet states allied to Russia buy Russian gas at fixed prices that had been set well below international market-based levels.

“When the existing price for Armenia and Belarus was two or three times lower than the international price this was taken for granted and nobody said that it’s politics,” he said, adding that both countries should honor their “contractual obligations.”

Grigorian insisted that the Armenian government is not seeking to take advantage of the crumbling oil prices that are hitting the Russian economy hard. He claimed that Yerevan recently asked the Gazprom giant to cut the price of gas delivered to Armenia primarily because the Russians wanted to raise it.

Gazprom raised its wholesale price for Armenia from $150 to $165 per thousand cubic meters in January 2019. Nevertheless the cost of gas supplied to Armenian households and businesses has remained unchanged since then.

Armenia’s Gazprom-owned gas distribution network has incurred additional losses as a result. Last month it asked the Public Services Regulatory Commission (PSRC) to allow a roughly 11 percent rise in its retail prices.

Lavrov also said that internal gas prices set by Armenian utility regulators make it harder for Gazprom to agree to a deeper discount.

In the context of the gas issue, the Russian minister also criticized ongoing criminal investigations into major Russian companies operating in Armenia. He singled out the Armenian railway network managed by the Russia Railways (RZD) giant.

Grigorian dismissed that criticism, saying that the Armenian authorities cannot allow any company to operate “beyond the law.” “On this issue we have a mutual understanding with our Russian partners at the highest political level,” he added without elaborating.

An Armenian law-enforcement agency raided the Yerevan offices of the network called South Caucasus Railway (SRC) and confiscated company documents in August 2018. The Investigative Committee alleged afterwards that SRC inflated the volume of its capital investments by 400 million drams ($830,000).

Both SRC and its Russian operator denied any wrongdoing. Russia’s Deputy Transport Minister Vladimir Tokarev said last September that the criminal investigation has effectively disrupted RZD’s operations in Armenia.

A spokeswoman for the Investigative Committee said on Thursday it has still not charged anyone as part of the continuing probe. Nor have the investigators identified any concrete suspects in the case, she said.

Investigators indicted several SRC employees in a separate probe which was completed recently. The latter are accused of embezzling a total of 8 million drams ($16,600).

In late 2018, law-enforcement authorities also launched a fraud inquiry into Gazprom’s Armenian subsidiary. They have not indicted any senior executives of the gas operator either.

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