9 Dec 2022 21:01

EAEU countries to be able to settle matters relating to common gas market in coming two years - Putin

BISHKEK. Dec 9 (Interfax) - The Eurasian Economic Union (EAEU) should settle issues related to the creation of a common EAEU gas market in the next two years, there is an understanding of how to coordinate positions, but it takes time, Russian President Vladimir Putin said on Friday.

"In the near future, in the next couple of years, we should implement our agreements, which were formulated earlier, namely - to achieve a common gas market within the next two years, to set up the principles of its work and proceed to the practical implementation; a common electricity market, and this is also extremely important," he said at a press conference after the Supreme Eurasian Economic Council (SEEC).

This indicates that EAEU countries retain plans to create common markets in the energy sector, particularly gas and electricity, by 2025, as stipulated by the EAEU Treaty.

"There's difficult work, a lot of issues related to the harmonization of positions. But you know, we had a very good discussion on this topic today, and a lot has become clear," the Russian president said regarding the discussion on common energy markets within the EEU.

He pointed out that the EAEU countries have different approaches to subsidizing the cost of energy, due to economic, political and other reasons. In particular, the head of state recalled that Russia subsidizes the transport component in the price of gas for end users in different regions of the country.

"But in order to talk about a single gas market, we must develop common principles of subsidies. Everyone understands this, it takes time, it requires collective work in the field of taxation, in the harmonization of rules and amendments to the tax codes, the operation of the tax system itself using modern technology. There is no contradiction or misunderstanding of how we should achieve these results. We just have to work hard over the next two years. And I think that we will achieve results for many of these positions," Putin said.

Previously, commenting on the results of the SEEC, Belarusian President Alexander Lukashenko said that at the moment the EAEU members agreed to discuss gas prices in a bilateral format, rather than within the five-nation framework. "In 2025, the partners in the EAEU should arrive at these common energy markets, including for gas. Well, and we've agreed that we will proceed quietly, we are not capable of more. It's not only Russia, as it turns out, that's not ready for such drastic changes, but almost all the countries that produce or buy gas today," BelTA quoted him as saying.

There are plans to create a common EAEU gas market by 2025. Last year Russia prepared a draft international treaty on the common EAEU gas market (adoption of the document is stipulated by the second stage of union gas market formation, which began in 2021 and was expected by the end of this year). The treaty should include the principles of operation and regulation of the common gas market, the order of interaction between the Union's countries during transportation and supply of gas from and to third countries, as well as the principles of access to gas transmission systems, pricing principles and forming rate policy in the Union's common gas market.

As previously reported, matters for discussion within preparation of the international agreement include the issues of pricing for gas transport services (Russia and Kazakhstan stand for separate pricing in domestic and foreign markets, gas consumers represented by Belarus, Armenia and Kyrgyzstan - for equal conditions for all members of the EAEU), the continuation of bilateral agreements on gas (whether they will be brought into line with the international treaty or remain in force in the current version), and the issue of non-discriminatory conditions of gas transit from third countries (initiated by Kyrgyzstan due to the geographical features of supplies and the need to purchase gas from third countries).

Russia believes that bilateral contracts should remain a priority even after the signing of the international treaty on a single gas market, which is in the interests of EAEU countries in the current situation in the global energy market, Russian Deputy Prime Minister Alexei Overchuk told Interfax in October. "Yes, we will continue to have long-term bilateral contracts. The parties have obligations, they are clear and in current conditions there are no more favorable offers to consumer countries in the gas market," he said, adding that the existence of bilateral agreements would not prevent the adoption of an international treaty, which would spell out the general principles of the market.

With regard to gas transport pricing, Overchuk said that the EAEU common market implies the formation of uniform tariff methodologies in the gas transportation segment within the Union, but rates for gas transportation within the country and the EAEU countries may differ, which reflects both the different level of necessary investment and takes into account the cross-subsidization within the country.