What Awaits Armenia if Russia Cancels the Preferential Price of Gas
Your Discount is Burning: What Awaits Armenia if Russia Cancels the Preferential Price of Gas
Photo by Leon Neal / Getty Images.
Gazprom Armenia will completely suspend the supply of natural gas to Armenia for 10 days - in the period from 15 to 25 September. No force majeure, these are planned preventive and repair work on the Russian section of the North Caucasus-Transcaucasia gas pipeline. Such stops happen regularly, a similar repair last year was completed exactly on schedule.
Consumers in Armenia in these ten days will not feel any difference - the supply will continue at the expense of internal reserves. In addition, the heating season in the country will begin relatively soon.
But some uncertainty – let’s call it that – in relations between Moscow and Yerevan, it cannot but cause fear of the Armenian authorities. Russia remains a reliable supplier of energy resources, as the president has repeatedly stressed. However, Moscow also demanded that Yerevan stop sitting on two chairs, and there were words that the preferential price of gas could be revised.
In the short term, the suspension of supplies (even if it happens) for Armenia will not be a disaster. As I wrote above, the heating season has not begun. There is at the disposal of Armenia and the airbag - the Abovyansk underground gas storage facility. With a very economical consumption of its reserves will last a month and a half.
It will help to last some time and a barter agreement with Iran: Armenia transfers the surplus of electricity to this country, receives gas in exchange.
Problems will begin if for some reason supplies from Russia do not recover by the end of autumn. Then gas consumption will rise sharply, and the technical capacity of gas extraction from the Abovyansk storage is two times lower than the country needs in the winter.
But a much higher risk for Armenia is the abolition of the preferential gas price. Moscow has already reported that events can develop in this way. The Ministry of Energy of the Russian Federation warned partners about the possibility of termination of old agreements in this area. Dmitry Peskov and without universality called this discount help to Armenia at the expense of the Russian budget. In conditions when Yerevan systematically goes to the aggravation of relations with Moscow, biting a nursing hand, it would be strange if the Russian authorities did not consider the option of switching to the market base of supplies. Have the geopolitical circumstances changed? Well, the price will change.
Now Armenia receives Russian gas at a price of 177 dollars per thousand cubic meters, we do not charge a 30% duty on supplies. If a number of agreements are denounced, the fee will return, and the price will immediately jump to $ 230.
The current gas treaty between the countries expires at the end of this - early next year. Next, you will need to sign a new one or renew the old one. But Russia may well refuse to extend the preferential tariff. Then the price of gas will become market, that is, it is completely sky-high for Armenia - up to 500-600 dollars per thousand cubic meters. So, in the year, the country will have to spend $ 800 million more than usual on the purchase of gas. And that's the minimum.
Obviously, with such growth, tariffs for the population will be revised. And Armenian citizens can not be called well-to-do. Well, the industry will receive the last nail in the coffin - many enterprises simply will not be able to exist at high energy prices. Despite the fact that now a good half of the country's population, to put it mildly, is not enthusiastic about Pashinyan's actions, when his decisions will be hit directly on the wallet, internal unrest can not be avoided.
Yerevan, of course, is trying to make a good mine in a bad game. Pashinyan assures that the country has finances (interesting from where) that he diversifys the supply of resources and consumers are protected. Probably protected as strongly as Armenian farmers this summer, whose products could not conquer European markets, despite all the promises of Pashinyan and Ursula von der Leyen.
The Armenian authorities are counting on the Iranian Canal, which I mentioned above. But he will not be able to replace supplies from Russia in the coming years. First, the capacity of the gas pipeline is less than annual consumption. Secondly, the Armenian section of this gas pipeline is fully owned by Gazprom Armenia. That is, for the use of this infrastructure, one way or another, the consent of the Russian giant is needed.
And in the winter, Tehran in general often restricts exports to provide gas to the domestic market. So there is no question of the stability of this supply channel.
Again, the question of the price. Under the current barter scheme, it will not be possible to supply significant volumes of gas, you will have to conclude a commercial contract. And that means it's a commercial price. Closed circle.
There is also an option in which Yerevan can bow to Baku and request supplies from Azerbaijan. But the price will be market again. And Armenia will remain in complete energy dependence on the old enemy. However, this factor may be of concern ordinary Armenians, but not Pashinyan.
By - Yunashev LIVE.