Gas Issue: Armenian government says negotiations with Russia underway

Gas Issue: Armenian government says negotiations with Russia underway


Armenia’s authorities are sending contradictory signals over the possible reduction in the prices of natural gas delivered from Russia. Some observers, however, downplay the significance of the current negotiations over the gas price, considering that it is unlikely to have an impact on the price of fuel sold to households and businesses in Armenia.

Newly appointed Minister of Energy and Natural Resources Levon Yolyan, however, stated on Thursday that the aim of the ongoing negotiations with the Russian gas monopolist, Gazprom, is a price reduction for residents of Armenia companies operating in the territory of the country.

“Currently, talks are being held in the direction that we have an opportunity for tariff reduction for residents. Let the negotiations be completed, we will keep you informed about the results,” the minister said.

Last year Russia lowered the price of natural gas supplied to Armenia from $189 to $165 per 1,000 cubic meters, but it did not impact the gas tariff inside the country, which continued to be at the level of $330.

Gazprom Armenia, a company that distributes natural gas in Armenia, is a 100-percent daughter company of Gazprom, and in that case it is only the Russian state-owned corporation that benefits from the price reduction.

The price of $165 per 1,000 cubic meters of gas is valid, however, until April 1, and its further size will be determined as a result of current negotiations. Minister Yolyan did not rule out the possibility of reaching an agreement with Russian Prime Minister Dmitry Medvedev, who is due to visit Yerevan on April 7.

“Everything is possible,” said the minister, who recently also stated that no talks are conducted with Russia on the matter of purchasing Russian gas with rubles.

Earlier, Armenian Prime Minister Hovik Abrahamyan stated that the matter was also part of the negotiations, even though no progress was made in that direction.

“It has been discussed within the framework of the Eurasian Economic Union. On April 7, the Russian prime minister will visit Armenia, and on April 8, there will be a visit of the prime ministers of the Eurasian Economic Union member states. We will hold a meeting of the Council of Eurasian Economic Union member states’ heads of government, during which we will try to discuss this issue and have answers,” he said.

Armenia’s former prime minister Hrant Bagratyan believes, however, that whatever the outcome of the talks is, people in Armenia will still continue to pay the same high price for gas. He says that the 2013 agreement sets out not quite favorable conditions for Armenia, determining the price of gas for it by the price existing in Russia’s Orenburg province.

According to Bagratyan, although the gas price should be determined by negotiations between Gazprom Armenia and Moscow’s Gazprom, the Armenian government does it right when it talks about it with Russia, saying that “we have the right to say that, we entered the EEU, why should we get more expensive gas than Georgia, Ukraine or Moldova?”.

“Raising these issues is right, but the government represented by the tariff-setting commission should take this internal margin and lower the tariff… We don’t do that,” said the opposition lawmaker, according to