Tuesday, May 19 2020 17:18
David Stepanyan

Expert: There are no single gas tariffs in the EAEU as of today and  there cannot be any

Expert: There are no single gas tariffs in the EAEU as of today and  there cannot be any

ArmInfo.. Commenting on the statement of the Armenian Prime Minister on the need to formulate single gas tariffs in the EAEU, it should be noted that there is no such issue on the agenda of the Union today and there  cannot be any  due to different levels of development and different models of  functioning of energy markets. Director of the Institute for Energy  Security, Doctor of Political Sciences Vahe Davtyan expressed a  similar opinion to ArmInfo.

"For the formation of a single tariff, it is necessary first to  ensure a unified financial and tax system.  Meanwhile, Eurasian  integration is still far from this. Moreover, even in different  countries of the European Union or MERCOSUR, in which energy  integration is at a very high level, various internal tariffs apply  gas.

Speaking at the online summit of the EAEU leaders on May 19, Prime  Minister of Armenia Nikol Pashinyan stated that global challenges  dictate the EAEU the urgent need to form a common gas market.  "The  formation of a single system of gas tariffs is a necessity that is  felt especially urgently in Armenia. I am convinced that the common  market will contribute to increasing the competitiveness of goods by  increasing the potential of the EAEU many times. Without this,  ensuring equal business conditions for all states is impossible," he  emphasized.

According to Davtyan's estimates, when commenting on the Russian gas  pricing policy for the EAEU member states, it's important to  understand that, by and large, there are two pricing models: spot and  long- term. "The first model is applied, for example, in relation to  EU countries. Trading is carried out on the exchange, which is why  gas prices there have recently been falling due to falling demand and  mild winters.  As for the pricing policy of Russia in the post-Soviet  space, in this case, a long-term model is applied, which involves  setting prices, usually for a year, "he said.

According to the expert, the question naturally arises: Why Armenia,  Belarus etc. do not switch to spot price model.? A similar  transition, in his opinion, is of course possible. However, only  subject to the liberalization of national markets for the creation of  a gas exchange, which, in fact, is provided for by the program for  the formation of the common gas market of the EAEU from 2025. "At the  same time, it is important to understand that spot prices are not  always low prices. Just a couple of years ago on the European market,  the price of gas ranged from $ 200 to 240," he said.

To note, in his response at the same EAEU summit, Russian President  Vladimir Putin pointed out that a single gas tariff in the EAEU  implies a single market, a single budget, a single taxation system.  Meanwhile, a similar level of integration in the EAEU, according to  his estimates, has not yet been achieved.  Accordingly, while prices  should be formed on the basis of market conditions, taking into  account costs, investments, providing profit for suppliers.

"The formula of the EAEU countries for gas prices proposed by the  draft EAEU Development Strategy until 2025 is supported by Russia,  Kazakhstan and Kyrgyzstan. Our Armenian and Belarusian colleagues  have not yet adopted this formula. They have their own point of view  on this issue, which consists in creating single tariffs. I think  that if the positions of our colleagues remain unchanged, it would  probably be logical to exclude the item on gas from the draft  strategy and approve it at the summit today. Discussion of approaches  to gas pricing can be continued through experts from the EAEU and the  EEC", Putin said. 

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