Gas Price Reduced as Armenia Joins Customs Union

Russia's state-controlled monopoly, Gazprom, raised the natural gas price for Armenia by 50 percent in April

YEREVAN (RFE/RL)—The issue of providing a government subsidy for the recently increased price of Russian natural gas is no longer “on the agenda” after Armenia’s decision to join the Moscow-led Customs Union, the country’s energy minister said Tuesday.

Russia’s Gazprom monopoly raised the gas price by 50 percent in April. The gas tariffs for Armenian households rose by only 18 percent last month 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, would not be financed from the state budget.

Energy and Natural Resources Minister Armen Movsisian told reporters on Tuesday that the export taxes levied in Russia will no longer be applied to the natural gas supplies to Armenia, as a result of which the gas price at the border will make $189 per 1,000 cubic meters – 30 percent less than the earlier negotiated price.

“In other words, the natural gas imported to Armenia will have the same price as the natural gas in Russia plus transportation costs,” explained Movsisian.

Negotiations between the governments of Armenia and Russia, however, continue, the official told RFE/RL’s Armenian service (Azatutyun.am). He explained that there is the issue of settling the debt for the gas delivered to Armenia at an increased price before September 3, the day when Armenian President Serzh Sarkisian announced, following talks with his Russian counterpart Vladimir Putin in Moscow, that Yerevan will join the Customs Union of Russia, Belarus and Kazakhstan.

Minister Movsisian did not specify in exchange for what the Russian side had agreed to provide the subsidy for the natural gas supplied to Armenia.

The Armenian media have speculated in recent months that the government could cede to Russia’s state-run gas monopoly Gazprom its remaining 20-percent share in the ARG national gas distribution network. Gazprom, which currently owns 80 percent of ARG, expressed readiness in June to offer a price discount in return for gaining full control over the gas distributing company in Armenia.

Citing the continuing talks as the reason, the Armenian energy minister refused to divulge details, saying only that the natural gas price for Armenia will be neither increased nor decreased.

“Earlier we conducted negotiations for the natural gas price to remain unchanged for a period of five years, but now that Armenia has decided to join the Customs Union this time restriction does not apply any longer as Armenia’s natural gas price will depend on domestic gas prices in Russia,” said Movsisian.

The minister also confirmed that there is no agreement on the new gas price between Armenia and Russia, while such an agreement does exist between Gazprom and ARG.

In reply to a question from an opposition lawmaker in the National Assembly last week Prime Minister Tigran Sargsyan said that there was no Russian-Armenian interstate agreement regarding the gas price and, therefore, its text could not be published as requested by the opposition.

The remarks fueled speculations in Armenia about the grounds for raising the gas tariff last summer without having an agreement on the price.

Leader of the ruling Republican Party’s parliamentary faction Galust Sahakian, earlier, too, explained that the tariff was raised on the basis of an agreement between the Russian gas monopoly and its Armenian subsidiary.

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4 Comments

  1. From Russia Without Love said:

    Let this be the proof to all you clueless “Russia is our friend” fools. If Russia was our friend, it would make gas free as a gesture of kindness so that Armenia would join the Customs Union on its own through the process of genuine friendship rather than be bullied into it. Russia is Russia’s friend. The fact that it happens to protect Armenia means nothing, except that it is protecting itself by it and for the benefit of Russia, they could care less what happens to Armenians and Armenia.

    Russia has taken control of Armenia’s infrastructure, thanks to its stooges calling themselves the “Armenian Government”. And that only means that Armenia will never be free, if it knows whats good for itself, thanks to “our friend”. This would be all fine and dandy had there been benefits to it, except the only “benefit” for Armenia is a mediocre existence on life support. Meanwhile both Azerbaijan and Turkey sit on Armenia’s former lands which “our friends” gave away and laugh all the way to the bank.

    • www.Voskanapat.info said:

      If they gave their gas for free Russia would be called “our fool” not “or friend”, but Armenia does not need more fools for friends as it already has plenty over here…

      The gas comes from Russia for the same price as it is sold in Russia and this is almost free because Russia has more gas than anybody in the world.

      What is more important is that Armenia gets superior Russian weaponry for free or almost free.

      Finally, when Armenian lands were given to Azerbaijan and Turkey, Russia was in deep distress and not ruled by Russians. The anti-Russian propaganda machine conveniently omits that at the same time Russian lands were given to Poland, Finland, Romania, etc.

  2. Avetis said:

    God bless Mother Russia. God bless Mother Armenia. And may God protect and preserve Russo-Armenian relations from all enemies both foreign and domestic.

  3. Oaan said:

    When Azerbaijan attacks NK and Russia comes to their Armenian colony’s rescue they will swarm through Georgia to get here. Russia will recover the Caucasus soon.

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