Devolution in Moldovan-Russian relations narrows maneuvering in negotiations on gas price – expert. IPN Analysis

The latest tendency of the Moldovan-Russian relationships significantly restrict room for maneuvers for Moldova in talks on natural gas price, says Valeriu Prohnitski, Director Executive of the Independent Analytic Centre “Expert-Grup”, interviewed by IPN. According to the expert, Molodva’s relationships with the Russian Federation grew complicated since the last price increase for gas. The wines’ import issue and the latest tendencies of the Transnistrian crisis are also troubling the relations between these two states. “It is obvious that Russia, having set clear strategic objectives, is not anymore willing to fuel its ex-allies’ economies and, at the same time, intends to take over the gas transportation infrastructure from Moldova, Ukraine, Byelorussia and from some Central-European countries”, says Prohnitski. In his opinion, taking into consideration that the intentions of the Russian Concern “Gazprom” aren’t guided by economic calculations, and are related to the latest Russian political strategy regarding its “immediate neighbors”, drawing a forecast about the new price for gas is quite difficult. If not in July, the expert considers, the price is to grow in September, the latest. “Gazprom” plans to set the price at USD 150-160, comparable to the one for some Central-European countries. “The closer to winter, the more vulnerable Moldova becomes in front of Russia’s pressures and the weaker are Moldovan arguments within negotiations”, the expert believes. The analyst states that maintaining the same price is possible only for a short period, for a half or one and a half years, under the condition of donating some assets from the energetic field to “Gazprom”. But, seemingly, the Government isn’t ready to accept such conditions. Director Executive of the “Expert-Grup” Centre believes that a possible rise in price for gas will lead to slowing down the economical development pace, will trigger price increases for certain public services, as well as technical restructuring at the enterprises using gas. Although, the impact over the population is expected to be more painful, especially for urban inhabitants, who consume a bigger amount of gas. According to him, when the price will go up, Moldovan officials will be able to do nothing on a short term. “The crisis in economy is already showing clearly, despite it is not related to gas prices, but due to the lack of markets for selling wines. The Government might try to attenuate the negative impact through redirecting heavier burdens on the producers’ shoulders in order to make the consumers’ life easier, by means of subventions and modified tariff policies. Obviously, all these actions will have positive results more socially than economically.” On a long term, it is necessary to reduce energy losses in infrastructure, introduce new technologies in construction, and diminish the gas-related addiction by using electric power instead. It is also opportune to search for alternative energy resources and participate at new pan-European projects on diversifying gas suppliers. In this respect, the economist termed the Moldovan-Russian negotiations as “not transparent”, which causes difficulties in making forecasts entirely based on reality. The talks regarding the new contract on gas deliveries for Moldova are resumed on Monday, June 5, in Moscow. According to the current contract, which expires on June 30, R. Moldova imports Russian natural gas at a price of USD 110 per 1000 cubic meters, compared to USD 80 previously.