Will Gas Prices Decrease in Armenia?

The newspaper "168 Jam" reports: During a meeting of the Eurasian Economic Union (EAEU) Intergovernmental Council held in Yerevan, Armenian Prime Minister Nikol Pashinyan highlighted the necessity for non-discriminatory pricing for energy resources within the union. Questions regarding gas prices are not only pertinent for Armenia but also for Belarus, which purchases Russian gas at $130 per 1,000 cubic meters, while in the neighboring Russian Smolensk region, the price is $70. Armenia pays $165 at the border.

According to the 2013 Armenian-Russian gas agreement, the price of gas sold to Armenia is tied to the price in the Orenburg region of Russia. However, residents are paying nearly double the price, approximately $285.

Before the EAEU meeting, the Russian side also announced intentions to coordinate a general program for Armenia's gas supply and gasification by 2030.

“Our countries pay serious attention to cooperation in the gas sector. We are working on both current and future projects, for instance, there is an agreement to coordinate the general scheme for gas supply and gasification for Armenia by 2030,” said Sergey Prikhodko, First Deputy Head of the Russian Government's Office, emphasizing that supplies to Armenia are conducted under preferential terms.

It is expected that by July 1, the parties should agree on both the new price and the overall scheme for gas supply until 2030.

168.am inquired with Hayk Gevorgyan, a member of the National Assembly's Standing Committee on Economic Affairs from the My Step faction, whether the gas issue was discussed within the context of the EAEU meeting and what the outcomes were.

“In the EAEU, as a unified entity where the same customs barriers apply, there cannot be different prices for energy carriers. It is absurd because, for example, gas for heating in Krasnodar costs $40, while in Armenia it costs $103, more than double. Consequently, Armenian cucumbers are more expensive than those grown in Krasnodar, though they circulate within the Customs Union. This means that from the outset, our cucumbers will not be competitive compared to those from Krasnodar. Therefore, there cannot be a common customs area with different energy carrier prices. This is the whole issue. It is noted that this unified price will be established within five years,” Gevorgyan responded.

When asked whether gas prices in Armenia would decrease with the establishment of this market, the deputy replied that there are two approaches: “If the EAEU wants to be competitive against third countries, then the gas price in Armenia should also drop to match Russia's price. However, if the gas pricing is based on the market price, then gas prices in Russia would need to increase. But it is certain that the prices must be equalized.”

For more details, refer to today’s issue of the newspaper.