Gas for power

Minister of energy resources Armen Movsisyan made a number of interesting statements in a briefing with journalists in the parliament. These statements give clues to the question where the 155 million debt comes from and why the 20% of Armenia’s share in ArmRusGazArd company was given to Russians, and what is going on around the issue of gas price. “The negotiation started in 2011, and since that time I have said that the price of gas would not change for consumers.

Meanwhile we negotiated with Russia to fix the gas price for a long-term because short-term changes of the price cause problems for the country. The negotiations finished this year, and we have agreed upon the price till 2018. During this time the extra load that will accrue on ArmRusGazArd company will be 1.1 billion dollars, 600 million out of which would accrue in four years starting from now. The debt of 300 million accrued since April 1,” said Armen Movsisyan and added that as a result of negotiation with Russia an agreement was reached that Armenia would pay half of the 300 million, and Russia would pay the other half of that money. “Russia annulated the financial load that would accrue starting from now till 2018, which is 80 dollars per 1000 cubic meters,” said Movsisyan. Armen Movsisyan has a habit of speaking about the gas price in a manner not to let anybody understand what he means. The reality is that in 2011 Armenia bought gas at higher prices but announced about that in 2013 only as there were elections before that and people could oppose to the government. In other words, through this deal Russia allowed the Armenian authorities to reproduce in return to the 20% in ArmRusGazArd company. The announcement that Russia will not change the price of gas till 2018 means that Russia will sponsor the incumbent government to stay on power till 2018, i.e. the next presidential election. This means that after 2018 whether the price will change or no will depend on the level of Russia’s participation in the formation of a new government. By the way, the amount of 600 million dollars the minister of energy is talking about is equal to the amount necessary for subsidizing gas supply, i.e. it is equal to 150 million drams annually.