CEE Energy NewsWatch Today
January 7, 2019 Monday
Russia ups gas price for Armenia by 10% in blow for new government
Russia has pushed up the price of gas it sells to Armenia by 10%.
Talks over the gas price were seen as key in assessing relations between the new post-revolution government in Yerevan and Moscow, the small nation's big strategic partner.
In 2019, Russian state gas giant Gazprom will sell gas to Armenia at $165 per thousand cubic metres, Gazprom said in a statement following a December 31 meeting between its chairman, Alexei Miller, and Armenian Deputy Prime Minister Mher Grigorian. The previous price was $150 per thousand cubic metres.
Prior to the announcement, the Armenian government had several times said it was aiming to have the gas price reduced. Garegin Baghramyan, Armenia's minister of energy and natural resources, said as late as December 27 that "Of course, we are holding talks on reducing the tariff, but I am unaware of Russia's proposals. The best result for us must be to reduce the tariff."
Armenia imports the large majority of its gas from Russia. Its only other supplier is Iran.
The price increase comes as Armenia appears set to lose its position heading the Russia-led Collective Security Treaty Organization, and days after Russian President Vladimir Putin and Armenian Prime Minister Nikol Pashinian met in Moscow.
The day after the meeting, Putin pointedly sent public holiday greetings to former Armenian president Robert Kocharyan, a Pashinian nemesis currently in jail in Yerevan on abuse-of-power charges, eurasianet reported.
The price increase is "symptomatic of how the Kremlin is exploiting Armenia's acute dependence on Russian hydrocarbons, using gas supply as a political instrument to put pressure on the Pashinian-led government," Eduard Abrahamyan, a London-based analyst of Armenia, told the news website.
Pashinian's enemies in the Republican Party of Armenia that ruled the country before the country's velvet revolution of April to May last year made political capital out of the gas reverse. "We are finishing the year not entirely proudly and fruitfully," wrote Eduard Sharmazanov, the party's press secretary, on his Facebook page the day the announcement was made. "Nikol, who for months has been accusing us of artificially increasing prices on gas and creation of a corrupt gas scheme, saying that since his becoming prime minister that Armenia-Russia relations have been wonderful, today reported that the price of gas is increasing."
Pashinian claimed that consumers would be paying the same price for energy thanks to "our certain internal adjustments". He did not detail those adjustments.
Separately, on December 27 Pashinian said Armenia was determined to continue "integration" within the Russian-led Eurasian Economic Union (EES).
"We are committed to further integration within the Eurasian Economic Union and treat seriously our chairmanship in the EES," Pashinian said during his meeting with Putin in Moscow.
"I am confident that after our chairmanship we will have even more effective integration in the union," Pashinian said, referring to Armenia's rotating presidency of the EEU that began on January 1.
The trade bloc brings together Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.
Putin praised the Russia-Armenia bilateral relationship, including "growing trade that increased by nearly 30 percent" last year.
He said that Russia was Armenia's largest economic partner, accounting for some 25% of Armenia's foreign trade.
Pashinian's My Step alliance won more than 70% of the vote in the snap parliamentary elections held on December 9.
Pashinian vowed to maintain close relations with traditional ally Russia, but at the same time said he would seek closer ties with the United States and the European Union.
Russia has a military base in Armenia.