Armenia’s withdrawal from EAEU could lead to gas price increase: Igor Yushkov

Igor Yushkov, leading analyst at the National Energy Security Fund and expert at the Financial University under the Government of the Russian Federation, commented to Alpha News on the possible consequences of a change in the price of Russian gas supplied to Armenia.

According to the expert, a change in the cost of Russian gas is directly linked to Armenia’s possible withdrawal from the Eurasian Economic Union, in which case the supply price could rise by at least 30%.

“Armenia’s leadership does not hide the fact that it ultimately wants to join the European Union. Russian leadership points out that it is impossible for a country to be in the European Union and the Eurasian Economic Union at the same time. If Armenia ultimately withdraws from the Eurasian Economic Union, it would then find itself in a system where goods are subject to export and import duties. Russia has an export duty on pipeline gas of 30% of the market price. So it follows that if Armenia leaves the EAEU, the cost of gas for it would rise by at least 30%,” Igor Yushkov noted.

According to the expert, even such an increase in the cost of gas would lead to higher tariffs, accelerated inflation, and an additional burden on Armenia’s economy.

“An increase in the cost of gas means higher gas tariffs directly within Armenia itself, for both the public and industry, as well as higher costs for electricity and utility services. The rising cost of gas will ultimately be factored into the cost of all services, products, and goods produced in Armenia. This, in turn, will drive inflation. Armenia’s Central Bank will have to raise its rate, loans will become more expensive for both the public and the commercial sector, and this will slow down the economy of Armenia as a whole,” Yushkov concluded.