YEREVAN — Armenia is prepared to transition to market-based pricing for Russian natural gas, as interstate subsidies provided in exchange for cheaper energy supplies ultimately result in the country paying a political and economic price, Finance Minister Vahe Hovhannisyan said.
Speaking on CivilNet Business, Hovhannisyan emphasized that if the price of Russian gas increases, Armenia should respond with the “economic behavior characteristic of a mature state.”
In June of this year, amid deepening political disagreements with Armenia, Russia’s Foreign Ministry sent a letter to official Yerevan stating that if Armenia continues its process toward European Union membership, Moscow could unilaterally suspend or terminate a 2013 agreement covering supplies of natural gas, petroleum products and rough diamonds.
Asked whether Armenia is prepared to pay market rates for natural gas if Russia decides to move to market-based pricing, Hovhannisyan said: “I think we will pay whatever price is determined by the market.”
At the same time, the minister said it is difficult to provide a definitive assessment at this stage because of the lack of clarity surrounding any potential price increase.
“The question should be how much the price will increase and when,” Hovhannisyan said.
Addressing the broader economic consequences of a possible increase in gas prices, the finance minister said the government has developed appropriate scenarios and calculated the potential impact on the state budget.
According to Hovhannisyan, these risks have also been taken into account in the draft 2027 state budget, which includes relevant analyses and projections.
