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Yerevan Insists On Lower Russian Gas Price


Armenia -- Deputy Prime Minister Mher Grigorian speaks at at the TUMO Center for Creative Technologies, Yerevan, January 21, 2020.

The Armenian government will keep pressing the Eurasian Economic Union (EEU) to create a single energy market which would lower the cost of Russian natural gas imported by Armenia, Deputy Prime Minister Mher Grigorian said on Thursday.

Grigorian insisted that “the issue is not closed” despite objections publicly voiced by Russian President Vladimir Putin earlier this week. “I think that we will continue our attempts to solve that issue in the EEU framework through a joint legal act,” he told RFE/RL’s Armenian service in an interview.

Grigorian said Moscow has signaled its readiness for a compromise deal on the issue. He did not elaborate.

The gas price is currently significantly lower for consumers in Russia than other members of the Russian-led trade bloc. Two of them, Armenia and Belarus, say this puts their manufactures reliant on gas in a disadvantaged position vis-à-vis their Russian competitors. Hence, their demands for uniform EEU energy tariffs.

Prime Minister Nikol Pashinian insisted on this idea during a video conference with the presidents of Russia, Belarus, Kazakhstan and Kyrgyzstan held on Tuesday. Putin rejected it, however, implying that Yerevan and Minsk should agree to even deeper economic integration with Moscow before pushing it.

Grigorian made clear that neither the Armenian side nor the EEU as a whole is prepared for such integration which would lead what Putin described as a “single budget and system of taxation” for all EEU member states. He said it would also raise questions about Armenia’s “sovereignty.”

The Armenian and Belarusian governments 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.

For the same reason, Yerevan urged Russia’s Gazprom giant in late March to cut its wholesale gas price for Armenia. It hopes that such a discount 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. Armenian utility regulators are due to decide by June 17 whether to allow the price hike.

“I have the impression that there are many possibilities of ensuring that gas does not become more expensive for the population [of Armenia] at this point,” Grigorian said in this regard. “You should consider this a mere impression or opinion because it would be inappropriate if I spoke [definitively] of solutions now.”

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