Armenia, Russia Agree to Gas Subsidy Deal

The deal could cede more Armenian energy assets to Gazprom

YEREVAN (RFE/RL)—Russia has agreed to help Armenia subsidize the recently increased price of Russian natural gas supplied to the country, Energy and Natural Resources Minister Armen Movsisian announced on Thursday.

Movsisian refused to give any details of the Russian assistance, saying that the two sides are making “final adjustments” to the deal and will make it public in the coming days.

Russia’s Gazprom monopoly officially raised the gas price by 50 percent in April. The gas bills for Armenian households rose by only 18 percent last month seeing as the Armenian government pledged to subsidize the rest of the price hike. The government made clear that the subsidy, worth an estimated $150 million per annum, will not be financed from the state budget. It has been negotiating with Gazprom in the hope of raising that sum.

Movsisian, who personally negotiated with Gazprom chief Alexei Miller in Moscow in June, said that those talks are essentially over. But he would not say whether the Russian assistance will take the form of a loan or a handover of more Armenian energy assets to Gazprom.

“We will make final adjustments and publish [all the details],” he told reporters after a weekly cabinet meeting in Yerevan.

The Armenian press has been rife with speculation in recent months that the government could cede to Gazprom its remaining 20 percent share in the ARG national gas distribution network or even Armenia’s largest cascade of hydroelectric stations.

Gazprom expressed readiness in June to offer a price discount in return for gaining full control over ARG. The Russian giant currently owns 80 percent of ARG.

Movsisian insisted that Armenia’s forthcoming Association Agreement with the European Union, which seems to be opposed by Russia, will not scuttle the new gas deal with Moscow. “They [the Russians] will definitely give the funding,” he said.

The Kremlin is playing the gas card to discourage another ex-Soviet state, Ukraine, from signing a similar agreement with the EU. Russian leaders say that the gas price for Ukraine will be lowered significantly if Kiev pledges to join instead a Russian-led Eurasian Union.

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6 Comments

  1. From Russia Without Love said:

    You see how Mother Russia cares for Armenia? Right after raising the gas prices they gave us a discount!! Which country on Earth would do such a wonderful thing to its best friend? Russia is beyond our friend, we must all agree to be Russia’s willing slaves.

    Just compare us to Israel who is unfortunate enough to receive billions of dollars in aid for free from the US… that is very damaging because they all became lazy as a result. Armenians are lucky enough to live in poverty and have their gas prices increased, it is all a secret trick from Mother Russia to get us to all work hard and not be lazy. As a result, Armenians are the hardest working people of earth because of Mother Russia!!

    Armenia must not have 20% of Armenia’s gas company… that is unacceptable and insulting to a kind and generous master… we must give the rest away to our beloved Russia because we can trust them 100%, since they created Armenia, and carefully cut it up to give away to Turks, leaving us the best parts, and let us enjoy it for free out of kindness, we owe them back for creating us and protecting us for the past ten thousand years.

  2. zograp said:

    Առանց Ռուսաստան Հայաստանը կկործանվի, ուշքի եկեք:Եվրոպան կտանի մեզ մեծ կորուստ, չի կարելի մատների արանքով նայել այս հարցին, կկորցնենք ամեն ինչ՝ սկսած մեր ազգային արժեքներից և ՍՐԲՈՒԹՅՈՒՆՆԵՐԻՑ: Արդեն ձեզ գենդեր են հրամեցնում, իսկ թե Եվրոպայի չարիքների սկիզբն է (մասոնների մեծ կործանարար ծրագրի): Ժողովուրդ, մի հրապուրվեք այդ գունավոր Եվրոպայով, երբ ուշքի գաք, շատ ուշ կլինի… Դեմ՝ Եվրոպա… Կողմ՝ Ռուսաստան…

  3. GB said:

    Armenia must come up, for a better solution of energy problems. Politically motivated Russia will give Armenia hard time in the future, if Armenia rely on Gazprom!!

  4. Hripsime said:

    I’m so sorry for this complex situation, I respect you (from Russia without love). Yes you are right but it is impossible right now to compare Armenia with Israel because science and technology in Israel is one of the country’s most developed sectors and Israelis are among the most highly educated people in the world.
    But Armenia is a developing country!

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