All people talk about nowadays is the gas price and they will keep talking about it until a final decision is not made regarding this issue. People will continue to talk about it even after a decision is made, however, the topic will not be about predictions, but rather consequences.
Although there was no official news about the gas price during the last week, however, our authorities did say a few things. There are some contradictions to what they said and people are confused by that.
On January 13, during an interview for “168 hours”, Prime Minister of Armenia Andranik Margaryan said that most probably there will be no rise in electricity.
“First and foremost, we must make sure there is no rise in prices for electricity because that could have a negative impact on our people.”
A couple of days ago, in response to some of the journalists’ questions, Minister of Energy Armen Movsisyan said that if the gas price is decided to be 110 dollars, then the price for electricity will rise by 3-4 drams. Minister of Trade and Economic Development Karen Tchshmarityan was asked the same question yesterday. He said that he didn’t think there would be a rise in the price for electricity, however, he meant for now. Only time will show what he means by “for now”.
“If a product costs an X amount of money, then each businessman managing a business must make his prices correspond to the international market prices so that he can always stay in the game. The businessmen that always rely on ceding, or providing electricity and gas at low prices and living on the money made by that, then those businessmen don’t have a future,” says the minister. Mr. Tchshrmarityan was very careful when talking about the consequences of inflation. According to him, “…the rise in gas and electricity prices may not have that much of a horrible effect on the branches of energy.”
Something just doesn’t seem to “fit in”. In this case, the authorities are the ones talking about relying and trying to convince businessmen. These businessmen need to set things straight in order to decide what they are going to do for the future. However, there is one thing that everyone agrees on and that is that the Russian side “cheated” Armenia (or the authorities). If the price was a market price and had to be increased by two times, that could have been done gradually. It is hard to believe that that would have made the Russian side lose a lot and that it was impossible to find better ways for solving the issue. Otherwise, the “strategic ally” concept can be looked at as the “ex friend” expression.
During his visit to Armenia these past couple of days, Foreign Minister of Georgia Gela Bezhuashvili said:
“The rise in gas prices in Georgia has to do with politics and economy is not involved here.”
Vartan Oskanyan, on the other hand, was more careful when choosing his words and believes that there is no need to rush.
What’s going to happen in the end? There were suggestions being made that Armenia hand over some energetic resources to Russia in exchange for the gas (for example, the Vorotan cascade) or ask for a loan from the Russians. However, according to Andranik Margaryan, “There is no way we are going to do that.”
As for asking for a loan, the Prime Minister is of the opinion that Armenia will not ask for a loan from the Russian Federation because there are cheaper loans to ask for.
Amongst all this, what was really interesting was the announcement made by the representative for “GasProm” company Dennis Ignateyev:
“The gas price for Armenia is the market price; basically, starting from April 1, the price for gas for Armenia could have been a more suitable price than 110 dollars if Armenia were to accept the offers made by the Russian side.”
Mr. Ignateyev talked about the offers being made. According to sources, the offers were Russia’s help in the construction of the Iranian-Armenian gas pipeline and refusal of Russia’s loan.
There is one more interesting thing: after the announcement made by Mr. Ignateyev, you get the impression that the $110 dollars is a fixed price which will be charged for gas starting from April 1st. Why April 1? According to the “Regnum” news agency, the Armenian side was able to sign a temporary contract with “GasProm”, according to which, Armenia will buy the gas from Russia for $56 dollars for the first three months of 2006. As to what will happen after that, nobody knows for sure, except president of the Armenian Progressive Party Tigran Urikhanyan. It appears that this political figure has great outlooks and knows something that we don’t know; otherwise, he wouldn’t announce that “Armenia will pay the fixed price of $85 dollars for gas and that will stay until 2013-2014.”
We asked Karen Tchshmarityan for his opinion on this; we thought that he would have more information. “No comment, I don’t know anything about that,” said the minister.
Seriously, we can predict that this issue will be finally solved by the end of this month after Kocharyan’s visit to Moscow. Dennis Ignateyev has a pretty high job at “GasProm” and he is not joking when he says April 1. If we are going to pay the new price for gas starting from that date, then the public services committee has to receive an appeal 90 days before that, in other words, until February 1. It will then be clear as to how strategic our ally is and whether or not we will be forced to take a look at our relations with Russia. This is proven by the survey conducted recently. According to the results, 75.7% of the population will change its attitude towards Russia if the country decides to impose high prices on gas.
Will people’s change in attitude towards Russia reflect upon the relations with our authorities? Foreign Minister of Armenia Vartan Oskanyan did not deny this:
“We will know which steps to take only after the negotiations,” said the minister.