Image Credits - Arka
In a significant development, Deputy Prime Minister Mher Grigoryan of Armenia has announced that Russia will maintain the current price of natural gas it supplies to Armenia in 2024. This announcement comes as a relief amidst concerns that Russia might raise the price of natural gas shipped to Armenia through Georgia.
Grigoryan expressed confidence that both households and enterprises in Armenia will continue to pay the same price for natural gas. He stated, “We have received confirmed information that the price of natural gas at the border will remain unchanged in 2024. I am confident that this will also apply to Armenian households and enterprises.”
This announcement follows the signing of a contract between Gazprom Armenia, a subsidiary of Russian Gazprom, and its parent company Gazprom for 2024. The contract does not include any provisions for price revisions. Russian Gazprom, the sole supplier of natural gas to Armenia for both residential and commercial use, has set the price at $165 per 1,000 cubic meters at the border.
In 2022, natural gas imports from Russia to Armenia witnessed a 6.1% increase, reaching approximately 2.6 billion cubic meters compared to the same period in 2021. This positive trend reflects the strengthening energy relationship between the two nations.
During a meeting of the Armenian-Russian Commission on Economic Cooperation in Yerevan, Grigoryan emphasized the favourable trade turnover between Armenia and Russia. According to the National Statistical Committee of Armenia, the trade turnover between the two countries in the first ten months of 2023 amounted to $5.4 billion, marking a significant 40.8% increase compared to January-October 2022. Armenian exports reached $2.9 billion, experiencing a remarkable 63% growth, while imports reached $2.7 billion, reflecting a 16.6% increase.
The Tourism Committee of Armenia reported that out of the 2.2 million tourists who visited Armenia in the first eleven months of 2023, half of them, 1.1 million, were from Russia. This demonstrates the strong cultural and social ties between the two nations.
Russia has not only predicted a decrease in the price of its natural gas exports but has also revealed plans to boost its budget spending for the upcoming year by a staggering 36.6 trillion roubles, equivalent to $383 billion. This substantial increase in spending will be allocated towards various sectors, including social welfare and military expenses. Such a move demonstrates Russia’s dedication to its internal growth while upholding its obligations on the global stage.
The decision made by Russia to maintain the price of natural gas for Armenia in 2024 marks a significant milestone. This agreement highlights the strong economic cooperation and trust between the two nations, showcasing Russia’s reliability as a steadfast partner in the Eurasian region. The successful negotiations demonstrate the effectiveness of political diplomacy between Armenia and Russia, two countries with a shared history and common interests in regional stability.
Russia is also fostering stability in the strategically important South Caucasus region by ensuring Armenia’s energy security. This decision not only strengthens Armenia’s energy security but also has broader implications for the geopolitical dynamics of the area. The assurance of stable prices from Russia reduces the risk of energy insecurity, thereby enhancing Armenia’s overall energy security. This is particularly crucial considering Armenia’s geopolitical location and its heavy reliance on Russian natural gas for its energy needs.
Stable and predictable energy prices are pivotal in economic planning and growth. With the unchanged price of natural gas, Armenia can effectively plan its budget and economic activities, contributing to its economic stability. This decision also serves as a testament to the strong bilateral relations between Armenia and Russia, showcasing Russia’s unwavering commitment to supporting Armenia’s economic stability and growth.