After restricting imports of some Armenian goods, Russia has threatened to stop supplying natural gas to Armenia at a significant discount if Yerevan continues its European integration policy.
The Russian daily Kommersant was the first to report late on Tuesday that Russian Energy Minister Sergei Tsivilev has sent a letter to the Armenian government saying that its efforts to join the European Union “do not correspond to the nature of the partnership between the governments and economic entities of our countries.” He said Moscow could therefore suspend or scrap a 2013 agreement to exempt Russian natural gas as well as oil products and diamonds purchased by Armenia from Russian export duties.
Russian Foreign Ministry spokeswoman Maria Zakharova confirmed the report, saying that the Russian Embassy in Yerevan delivered Tsivilev’s letter to the Armenian Ministry of Territorial Administration and Infrastructures on Wednesday.
“The document records Moscow’s intention to revise the intergovernmental agreement of December 2, 2013 on cooperation in the supply of energy resources and rough diamonds,” Zakharova told the RIA Novosti news agency.
The agreement has served as the basis for the gas price for Armenia which is set well below international market levels. It was signed shortly before Armenia’s accession to the Eurasian Economic Union (EEU), a Russian-led trade bloc. President Vladimir Putin and other Russian leaders have warned in recent weeks that the South Caucasus country can no longer remain part of the bloc while seeking eventual membership in the EU. They have also called into question the discount essential for the Armenian economy.
“We supply gas to Armenia at a quarter of its price, to our own detriment (the price in Armenia is $177.50 per thousand cubic meters, while in Europe it’s $633 per thousand cubic meters),” Russian parliament speaker Vyacheslav Volodin said on Friday. “During these difficult times, we are supporting Armenia’s economy and its citizens. What we get in return is [Prime Minister Nikol] Pashinian’s meanness and dishonesty. This cannot continue.”
Pashinian countered a few days earlier that the Russians cannot unilaterally raise the gas price now because it is fixed in a 10-year supply contract signed by the two sides in 2022.
Pashinian also dismissed the latest Russian threats on Wednesday as he campaigned for the June 7 parliamentary elections in which his party is challenged by opposition groups promising to repair Armenia’s relations with its traditional allies.
“The people of Armenia must have an alternative: to be part of the EEU or to be part of the European Union,” he told supporters. “I will not decide that, you will decide that. My task is to give you alternatives, and you have alternatives. Our partners responding to this with threats, even if hidden, are acting against themselves.”
Pashinian claimed that Armenia sill soon be awash with “billions and trillions” of dollars as a result of transport links and other commercial ties forged with neighboring Turkey and Azerbaijan. It can therefore afford a higher gas price, he said.
Russia accounts for at least 80 percent of natural gas imported to Armenia. In addition to being supplied to households and power plants, it is also heavily used in some sectors of the country’s economy such as agribusiness.
Russian-Armenian relations have deteriorated further in recent weeks and especially after two European summits held in Yerevan early this month. Putin is expected to discuss Armenia’s continued membership in the EEU during Friday’s summit of the leaders of the bloc’s member states which will be boycotted by Pashinian.
Russian officials increasingly warn that Armenian exporters risk losing their tariff-free access to Russia’s vast market. Armenian exports to Russia totaled almost $3 billion last year, compared with $667 million worth of goods exported to EU member states.
Citing sanitary grounds, Russian authorities have already banned the import of Armenia’s most popular brand of mineral water and imposed serious restrictions of Armenian cut flowers imported to Russia. They gave a similar reason for a separate ban imposed over the weekend on wine and brandy produced by three Armenian companies.
Also, hundreds of Armenian trucks carrying other goods are reportedly stranded at the sole Georgian-Russian border crossing. Speaking to RFE/RL’s Armenian Service by phone on Tuesday, some of their drivers said Russian customs officials are obstructing their entry into Russia with additional and extremely slow sanitary inspections.
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