Russia’s President Vladimir Putin dismissed on Tuesday Armenia’s and Belarus’s persistent calls for the Eurasian Economic Union (EEU) to set uniform energy tariffs which would reduce the cost of Russian natural gas imported by them.
Both ex-Soviet republics heavily dependent on Russian gas have been pressing for the creation of a single EEU market for natural gas and other fuel. It would essentially mean the same gas prices for gas-exporting Russia and the four other members of the Russian-led trade bloc. The Russian gas price for domestic consumers has always been significantly lower than for Armenia and even Belarus.
Prime Minister Nikol Pashinian insisted on the idea of uniform gas tariffs during a video conference with the presidents of Russia, Belarus, Kazakhstan and Kyrgyzstan.
“A single market for energy resources functioning under non-discriminatory principles must be one of the foundations of our integration,” he said. “Qualitative progress in integration processes is impossible without it. It is impossible to ensure equal economic conditions for all participants of the union without it.”
Putin rejected the idea, implying that Yerevan and Minsk should agree to even deeper economic integration with Moscow before pushing it.
“As regards a common tariff for shipments and transit of gas proposed by our Armenian and Belarusian friends, we believe that it can be introduced only in a [broader] single market with a single budget and a single system of taxation,” he said. “As we know full well, such a deep level of integration within the EEU has not yet been achieved.”
“In the meantime, gas prices must be set on the basis of market conditions … I want to stress, my dear colleagues, that this is common international practice,” added Putin.
The leaders of Kyrgyzstan and hydrocarbon-rich Kazakhstan appeared to side with Putin on the issue.
Pashinian and Belarusian President Aleksandr Lukashenko say that Moscow should cut the prices of gas delivered to their countries also because of the recent coronavirus-related collapse in global energy prices. Lukashenko complained last month Belarus is now paying more for Russian gas than European Union member states.
For the same reason, the Armenian government urged Russia’s Gazprom giant in late March to cut its wholesale gas price for Armenia.
The government hopes that such a move would at least prevent a sizable increase in internal Armenian gas prices sought by Armenia’s Gazprom-owned gas distribution network. The Gazprom Armenia network argues that they have remained unchanged since Gazprom raised its wholesale tariff by 10 percent in January 2019. The gas operator has incurred major losses as a result.