Gas Price Negotiations Will Conclude with Entry into Union State: 'Hraparak'

'Hraparak' reports: 'There is a certain expectation that in Armenia's current uncertain and vulnerable situation, a political component may emerge concerning gas supplies, and Russia might use gas as a tool of pressure against Armenia's potential western orientation. Especially given that there are talks that Russia has presented Armenia with a large bill for the gas consumed. This was recently stated by Arman Babajanyan, president of the 'For the Republic' party.

Currently, Armenia pays $165 per thousand cubic meters of gas at the border to Russia, while Russia sells the same gas to European countries for $1500 per thousand cubic meters, which is $1335 more expensive. In other words, if we import 2 billion cubic meters of gas per year, it turns out that Armenia receives an annual subsidy of approximately $2.6 billion from Russia—about $220 million a month. These calculations were made by former Prime Minister Hrant Bagratyan to demonstrate how dangerous a change of vector can be and what might follow from our pro-western actions.

It is clear that this generosity has a price. Putin also does such favors to Belarus. And Belarus is part of the Union State and is Russia's most loyal ally. Armenia is also part of the EAEU, where there are no special tariffs, and we benefit from that as well. Most importantly, we benefit from the law established in 2013, which stipulates the application of the gas price factors that exist in Russia's Orenburg region.

The 2013 agreement was signed for 30 years, meaning it remains in force until 2043; however, under this agreement, the parties can terminate it at any time by giving each other six months' notice. In other words, Russia can say at any moment, 'I am now in a force majeure situation,' and offer Armenia a new price to negotiate. This new price, in light of Armenia's anti-Russian maneuvers, will likely approach European prices. In this case, Bagratyan has calculations: if our gas price approaches the international one, the drop in living standards will become 30 percent, and poverty will exceed 50 percent.

Certainly, in this situation, we would need new negotiations with Russia and renewed discussions about gas prices. However, it is also possible that the conclusion of those negotiations will be Armenia's entry into a new Union State.'

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