On 19 May, Russian President Vladimir Putin dismissed the idea of forming a common tariff on transportation and transit of natural gas within the Eurasian Economic Union (EAEU) at a meeting of the Supreme Eurasian Economic Council, reported arka.am.
“As for the common tariff on transportation and transit of natural gas proposed by our Armenian and Belarusian friends, we suggest that a common tariff may only be introduced on a common market with a common budget and a common taxation system. Such a deep integration level has not been reached in the EAEU so far,” he was quoted as saying. Putin stressed that prices should be formed based on the market environment, with consideration to the costs and investments of suppliers, as well as ensuring a return on capital invested in production. He added that it is standard practice.
Putin also stated his belief that tariff issues on the EAEU gas market can be discussed later at the expert level. “If the positions of our Armenian and Belarusian friends remain unchanged, it would probably be logical to exclude the item [of] gas from the draft strategy on the EAEU development until 2025 altogether [than] approve it today,” he added.
Prior to Putin’s statement, Armenia’s Prime Minister Nikol Pashinyan stressed that a single energy market with non-discriminatory principles of operation should become one of the bases for integration into the EAEU. Pashinyan also said that without this form of market, the qualitative progress in integration processes is impossible and that it is not feasible to ensure equal conditions for economic activity for all members of the union without it. “We proceed from the fact that… the strategic directions of the development of Eurasian integration until 2025 [needs to include the discussion of] the principle of applying common approaches to prices and tariff setting on the EAEU common gas market. [This includes] uniform tariffs for services rendered to natural gas monopoly entities during transportation and transit…" he said. Armenia and Belarus insist on the lowering of gas prices, while Kazakhstan and Kyrgyzstan side with the Russian standpoint.
On 31 March, Armenia's Vice Prime Minister Mher Grigoryan wrote a letter to Gazprom CEO Alexei Miller, suggesting a renegotiation on the existing gas price. On the same day, Armenian Prime Minister Nikol Pashinyan held a phone call with Belarusian President Alexander Lukashenko. They both indicated that the current price for Russian gas is overpriced given the recent trends in the world market (Caucasus Watch reported).
The gas supplies to the Armenian domestic market are regulated by Gazprom-Armenia, which is 100% owned by the Russian Gazprom. Last year, gas prices on the Georgia-Armenia border increased from $ 150 to $ 165 per 1,000 cubic meters. Before the coronavirus pandemic, Gazprom announced that gas prices for Armenia would not change this year.
