Armenia could lose its preferential Russian gas price if it revises its allied relationship with Moscow, according to Mikhail Kalugin, director of the Russian Foreign Ministry’s Fourth Department for Commonwealth of Independent States countries.
“We have an extensive treaty and legal framework with Armenia that establishes the privileged, allied status of bilateral relations. If the Armenian authorities, as part of their foreign policy ‘diversification,’ want to revise that status, that is their right. However, in that case they will also have to give up the benefits Moscow provides exclusively to its allies. One example of such a benefit is the gas price,” Kalugin said, according to RIA Novosti.
The diplomat stressed that Russia does not oppose Armenia purchasing gas from other countries, as such a possibility is stipulated in the 2013 Russian-Armenian agreement on gas.
“However, it is necessary to understand what the alternative to Russian supplies is. Let me provide a few figures. Russia supplies Armenia with up to 85% of the gas consumed in the country, or about 2.2-2.7 billion cubic meters annually. Supplies are made without export duties at a fixed price of $177.5 per 1,000 cubic meters. Armenia also receives petroleum products from Russia duty-free,” the department director said.
On July 30, Economic Development Minister Maxim Reshetnikov told reporters that Russia supplies gas to Armenia at $177.5 per 1,000 cubic meters, while current “European” gas prices exceed $600 per 1,000 cubic meters. According to him, this can only be described as a subsidy, amounting to about $1 billion annually.
In May, the Russian Foreign Ministry said a letter had been delivered to Yerevan through the Russian Embassy in Armenia. It stated that if Armenia continues its process of joining the European Union, Russia would unilaterally suspend or terminate the agreement on cooperation covering supplies of natural gas, petroleum products and unprocessed natural diamonds.
